Bank of India(BoI) Q3 results: Net profit jumps 412%

 

State-owned Bank of India on Wednesday reported a more than five-fold jump in standalone net profit to Rs 540.72 crore for the quarter ended in December. The bank had registered a net profit of Rs 105.52 crore in the year-ago period.

However, total income during the third quarter of financial year 2020-21 was down at Rs 12,310.92 crore as against Rs 13,338.09 crore in the same quarter of the previous year, Bank of India said in a regulatory filing.

On a consolidated basis, the bank posted a net profit of Rs 610.37 crore, up by more than four times as against Rs 138.20 crore in the year-ago period. Income was down at Rs 12,372.88 crore as against Rs 13,430.53 crore.

On the asset front, gross bad loans or non-performing assets (NPA) fell to 13.25 percent of gross advances at the end of December 2020 as against 16.30 percent in the year-ago period. In value terms, gross NPAs were Rs 54,997.03 crore, lower than Rs 61,730.54 crore.

Likewise, the net NPA was trimmed to 2.46 percent (Rs 9,077.32 crore) from 5.97 percent (Rs 20,113.34 crore).

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Another Privatisation news- Two of these three banks are likely privatisation candidates

The market is betting on Punjab & Sind Bank, Bank of Maharashtra and Bank of India as the likely candidates for the finance minister’s ambitious bank privatisation plan. In her Budget speech, finance minister Nirmala Sitharaman said the government planned to privatise two sate-run banks, other than IDBI Bank. Analysts believe that the likely candidates will be from the pool of banks which were not part of the merger process. The government had earlier allowed merger of 13 banks into five banks.

Anil Gupta – vice-president and sector head, financial sector ratings, ICRA, said Punjab and Sind Bank and Bank of Maharashtra looked probable candidates for privitisation. Of the six banks kept out of merger, Indian Overseas Bank, Central Bank and UCO Bank are under PCA (prompt-corrective action), he explained. The Reserve Bank of India had kept the three banks in the PCA framework after a massive asset quality deterioration, losses in the books and lower capital levels. Gupta said PCA banks were unlikely to be offered for privatisation due to poor investor demand.

Leaving State Bank of India and five merged banks, there are six public sector banks in the banking system. The six banks include Bank of India, Punjab and Sind Bank, Bank of Maharashtra, Indian Overseas Bank (IoB), Central Bank of India and Uco Bank. Gupta also said the government was unlikely to consider privitisation of Bank of India due its large size. “The government may want to test the water with smaller banks first,” he added.

According to JM Financial, “While the details are awaited, we believe the most likely candidates will be from the pool of banks which were not part of consolidation. While these candidates are small and are not expected to provide any material resources to the government, we believe that this is a step in the right direction and can act as a test case for privatisation of other major public sector banks in future.”

In a note to its clients, Kotak Institutional Equities said the task of privatising two PSU banks may be difficult to achieve but could result in more privatisations, if successful. Lack of interest among potential buyers remains a key concern given the structure of these banks, Kotak said.

In an interview with CNN News 18, Niramala Sitharaman said the government wanted more public sector banks which are functionally strong, professionally managed and can meet the demands of growing aspirational India. “If I am going to be sitting around with such public sector banks which are just not in a mood or a position to stand up, is it right to pour tax-payers money into such banks? When there may be buyers who can buy and run it efficiently,” she said.

The government has proposed to introduce required legislative amendments for privatisation of two PSBs in the Budget session itself.

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Eye on this PSBs to be privatise: Govt mulls corporate, foreign bank participation

 

Indian policymakers are discussing ways to open up the banking sector via easing norms for corporate and foreign bank participation in acquiring public sector banks that the central govt is looking to privatise, sources with knowledge of the matter told ET Now.

Currently, industrial houses that have less than 60% of their turn over from non-financial entities are not allowed to apply for bank licences and their equity participation is also limited to 10%, as regulators have feared that this could risk financial stability because of the propensity of the corporates to milk banks for ‘self-loans.’

ET Now learns that there’s a rethink on the existing policy between policymakers even as the discussions are at an “early stage”. Sources say the government and the central bank may move with “abundant caution” and will take into account global experience and prior experience as well. 

Greater regulatory vigilance in terms of preferring corporate players with a long term 10-year business plan, “Fit & Proper Criteria” for corporate participation for taking equity in banks, tighter norms for related party transactions could be put in to ensure no excessive concentration or risks to financial stability. 

"We need to open up the banking system but the move will be designed with “abundant caution” and will need stonewalling from misuse. Opening up banking sector will come with greater regulatory vigilance on banks, fin institutions," one of the officials told ET Now.

Policymakers are also discussing allowing foreign banks with Indian subsidiaries to participate in buying government stake when state-owned banks like Central Bank of India, Bank of India, Punjab and Sind Bank, IOB and UCO Bank are privatised. 

The banking sector has been plagued with rising bad loans leading to decline in capital adequacy ratios and in some cases failure. Recently, Yes Bank was saved through government and RBI intervention when SBI lead consortium infused more capital into the private lender to save it from bankruptcy. Last week the government and RBI had to intervene to aid the rescue of Lakshmi Vilas Bank by the Indian subsidiary of DBS Bank, a move that reflected a change in thinking of the central bank and the government. 

Besides DBS, there are only one other foreign bank that has Indian subsidiaries -- SBM Bank. SBM Bank (India) Limited (Subsidiary of SBM Group) and DBS Bank India Limited have been issued licence on December 6, 2017, and October 4, 2018, respectively for carrying on banking business in India through a wholly-owned subsidiary. 

The widening of this move to allow foreign banks to buyout public sector banks when the government decides to privatise them will not only increase competition in the sector leading to efficiency but will also make a paradigm shift in the sector. The larger aim is to make Indian banks globally competitive. 

The discussion on this is at early stage but the policy could be timed with the government's larger privatisation policy that will allow selling of some Indian public sector banks. Bank of India, Central Bank of India, Bank of Maharashtra, Punjab & Sind Bank are some of the state-run lenders that the government is looking to privatise.

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Bank of India(BoI) Q2 results: Profit jumps over two-fold

Bank of India on Friday reported over two-fold jump in September quarter consolidated net profit at Rs 543.47 crore as bad assets came down. The bank posted a net profit of Rs 257.31 crore for the same quater a year ago.

Total income rose to Rs 12,477.79 crore in July-September 2020-21 from Rs 12,062.55 crore in the year-ago period, the state-owned lender said in a regulatory filing.

On standalone basis, the net profit in the quarter rose to Rs 525.78 crore as against Rs 266.37 crore a year ago.

Income grew to Rs 12,408.66 crore from Rs 11,985.50 crore.

The bank's gross non-performing assets (NPAs) fell to 13.79 per cent of gross advances as on September 30, 2020 from 16.31 per cent by the year-ago period.

In value terms, gross NPAs or bad loans stood at Rs 56,231.76 crore as against Rs 61,475.60 crore earlier.

Net NPAs came down to 2.89 per cent (Rs 10,443.71 crore) from 5.87 per cent (Rs 19,645.83 crore).

However, provisions for bad loans increased to Rs 2,133.87 crore during the quarter from Rs 1,452.09 crore parked aside for the year-ago same quarter.

Overall provisions and contingencies also rose to Rs 2,312.29 crore in the quarter under review from Rs 2,052.27 crore a year ago.

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Bank of India(BoI) net profit jumped by 247% in Q1

Bank of India(BoI) reported a net profit of Rs 843.6 crore in the quarter ended June 2020, a rise of 2.5X as against Rs 242.6 crore in a year-ago period, due to lower provisions.

Net Interest Income (NII) in Q1FY21 was down marginally to Rs 3,481.1 crore from Rs 3,485.4 crore, compared to the same period a year ago.

Pre-provision operating profit increased to Rs 2,844.52 crore from Rs 2,271.35 crore in the same period last year.

Asset quality during the quarter improved significantly as gross non-performing assets (NPA) fell 6.1 percent to Rs 57,787.8 crore from Rs 61,549.9 crore while net NPA declined 7.3 percent to Rs 13,275 crore from Rs 14,320.1 crore, compared to the previous quarter.

Gross NPA as a percentage of gross advances fell by 90 bps to 3.6 percent from 3.9 percent and net NPA as a percentage of net advances decreased by 30 bps to 3.6 percent from 3.9 percent, on a sequential basis.

Total provisions in Q1FY21 declined to Rs 1512.07 crore from Rs 8,141.92 crore in the previous quarter. Provisions during Q1FY20 were at Rs 1,911.98 crore.

The Provision Coverage Ratio of the bank as on June 30, 2020, was 84.87 percent versus 83.74 percent as on March 31, 2020, and versus 77.18 percent as on June 30, 2019.

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Overall Comparison of Top 8 Banks in India

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Bank of India Q4 Result : Posts net loss of 3571 cr

Bank of India slumped 8.93% to Rs 50 after reporting net loss of Rs 3,571.41 crore in Q4 March 2020 compared with net profit of Rs 251.79 crore in Q4 March 2019.

Total income fell 0.63% to Rs 12,215.78 crore in Q4 March 2020 over Q4 March 2019. Pre-tax loss stood at Rs 5489.36 crore in Q4 March 2020 compared with pre-tax profit of Rs 405.75 crore in Q4 March 2019. The Q4 earnings was announced during market hours today, 25 June 2020.

The net profit was impacted by higher provisioning. Provisions and contingencies surged 329.10% to Rs 8,141.92 crore in Q4 March 2020 as against Rs 1,897.43 crore in Q4 March 2019. Provision coverage ratio stood at 83.75% as on 31 March 2020.

Gross non-performing assets (NPAs) stood at Rs 61,549.93 crore as on 31 March 2020 as against Rs 61,730.54 crore as on 31 December 2019 and Rs 60,661.12 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 14.78% as on 31 March 2020 as against 16.30% as on 31 December 2019 and 15.84% as on 31 March 2019. The ratio of net NPAs to net advances stood at 3.88% as on 31 March 2020 as against 5.97% as on 31 December 2019 and 5.61% as on 31 March 2019.

The CASA level increased from Rs 1,81,765 crore in March 2019 to Rs. 1,97,751 crore in March 2020, i.e. with a growth of 8.79%. The CASA ratio stood at 41.50% in March 2020.

The bank said that the COVID-19 crisis has resulted in significant volatility and decline in the global and local economic activities. The situation continues to be uncertain and the bank is evaluating the situation on ongoing basis. The major challenge for the bank would arise from volatility in cash flows. Despite these events and condition, there would not be any significant impact on banks results in future and on the going concern assumption.

Bank of India provides a wide range of banking products and financial services to corporate and retail customers. The Government of India holds 89.1% stake in Bank of India as on 31 March 2020.

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Top Public Sector Banks In India 2020

These banks have emerged to be trusted brands where people deposit and invest money without thinking twice. Some of these banks stand out when it comes to offering services and are thus a preferred choice of greater number of people.

Here is a look at some of the best public sector banks in India.

1] State Bank of India 

Commonly known as SBI, this bank was set up in the year 1955. It is one of the oldest and the most trusted public sector banks in India. SBI is owned by the Indian government. It offers all kinds of banking services and is known for maintaining transparency in its dealings. It boasts of more than 40 crore satisfied customers.

After receiving an overwhelming response from people in India, the bank went on to open its branches worldwide. Today, it has nearly 200 offices in 36 different countries.  The headquarters of SBI are located in Mumbai.

2] Bank of India

This bank was established in the year 1906 as a privately owned entity. However, after the nationalization of banks, it became a public sector bank. This change took place back in 1969. The bank has 5,500 branches operating across the country. 

It has been serving millions of Indians by catering to their banking requirements.The bank also has its branches outside the country. It operates in 22 other countries with around 60 branches. New York, Paris, London and Singapore are among the countries where Bank of India has its branches.

3] Punjab National Bank

This bank came into being in the year 1895. It was founded under the guidance of one of the greatest Indian leaders of all times, Lala Lajpat Rai. The bank was established as a part of the Swadeshi movement. PNB was managed solely by Indians.

It became extremely popular in the pre-independence era and is still trusted as much. It offers several banking services and is known for providing quality banking products. The bank has around 7000 branches and has its presence in every nook and corner of the country.

4] Bank of Baroda

Bank of Baroda was opened in Vadodara, Gujrat in the year 1908. The bank is known to offer quality banking and finance services to its customers ever since its inception.

It is known to be the second largest nationalized bank in the country. The bank does not only operate in India but has its presence around the world. It operates in as many as 25 countries across the globe with more than 75 million happy customers. Dena bank and Vijaya bank merged with Bank of Baroda recently thereby making it an even bigger entity.

5] Central Bank of India

Central Bank came into being in the year 1911. It has been serving the customers happily ever since the beginning. The bank is known to offer numerous banking products.

It has a team of qualified and experienced bankers who have the answer to all your banking related queries and are always happy to help their customers. The bank has nearly 5,000 branches operating pan India. It also has offices in Hong Kong and Nairobi.

The headquarters of this bank is set up in Mumbai.

6] Canara Bank

Established in the year, 1906, Canara bank has its headquarters in Bengaluru. The bank has more than 6000 branches and nearly 9500 ATMs operating across the country. It offers several banking products and is known to offer impeccable service. It has more than 8 crore happy customers.

The bank does not only operate in India but has its branches in many other countries too. It has been serving people in New York, Hong Kong, Shanghai, London, Manama, Leicester, Johannesburg and Dubai.

7] Union Bank of India

Union Bank of India started as a limited company in the year 1919. It became a full-fledged bank in the year 1969 after nationalisation. The bank offers numerous banking products. By providing quality banking services consistently for years it has managed to acquire more than 5 crore customers.

Its customer base is increasing with every passing year. It is the proud owner of over 4500 branches spread across India. It also has branches in 4 other countries including Hong Kong, Sydney, Dubai and Antwerp.

8] UCO Bank

UCO Bank was established back in the year, 1943. It has its headquarters in Kolkatta, West Bengal. The bank has around 50 branches across the country and nearly 4000 plus service units. It has also made its presence overseas with branches in Singapore and Hong Kong.

9] Bank of Maharashtra

Bank of Maharashtra came into being in the year, 1935. The bank has been offering excellent service to its customers ever since its inception. It provides all kinds of banking and finance services. It has its headquarters in Pune. 87.74% of the total shares of the bank are held by the Government of India.

10] Indian Overseas Bank

Indian Overseas Bank was established back in the year, 1937. It has more than 3,400 branches across the country. The bank offers a host of banking services to meet the requirement of different segments of customers. After its success in the country, the bank went on to open branches in foreign land. It has 6 foreign branches.

You can safely open account and acquire other banking services from any of these banks!

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Bank of India(BoI) hits upper circuit on PSB privatisation hopes

Bank of India shares surged Monday, hitting the maximum permissible daily upper limit, on expectations that New Delhi will privatise some government-owned lenders as part of its broader goal of boosting the financial health of the state-run banking system. 

Bank of India shares hit the upper circuit of 20% during the day’s trading before shedding some of its gains to close at Rs 40.80 apiece, still up 18%. 

“Select public sector banks are now back in flavour amid privatisation buzz,” said Sanjiv Bhasin, Director at IIFL Securities. “Investors are now seen rushing to capture any such rally that could even double their investments. The government seems to be pursuing reforms in the banking sector.” 

India has taken baby steps toward privatising one or more state-run banks to make them stronger, likely undoing a legacy that started with the nationalisation of banks in 1969, ET reported on June 3. 

A select group of top government functionaries has begun discussions on the proposal. 

But the process may take time as the country is now busy battling the coronavirus-related crisis, which is likely to have a debilitating impact on the economy. 

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Bank of India(BoI) reports net profit in Q3

Bank of India on Friday reported a consolidated net profit of Rs 138.20 crore for December quarter 2019-20.

The state-owned lender had posted a net loss of Rs 4,643.71 crore for the year-ago period.

Total income during the quarter under review rose to Rs 13,430.53 crore from Rs 11,791.16 crore in the same period a year ago, the bank said in a regulatory filing.

Provisioning for bad loans and contingencies was reduced to Rs 4,028.03 crore during the quarter as against Rs 9,123.65 crore earlier, it said. Of this, provisioning for bad loans stood at Rs 3,779.37 crore, down from Rs 9,201.55 crore in the year-ago period.

Gross non-performing assets (NPAs) were at 16.30 per cent of the gross advances at December-end 2019 from 16.31 per cent by the same period a year ago.

Net NPAs or bad loans were 5.97 per cent, as against 5.87 per cent.

"During the quarter ended December 31, 2019, the bank has made additional provision of Rs 501.45 crore in view of uncertainty of recovery and deterioration in value of underlying assets in respect of 49 NPA accounts.

"The provision in such accounts as on December 31, 2019 is Rs 1,083.79 crore," Bank of India said.

On standalone basis, there was a net profit of Rs 105.52 crore during the quarter under review. It had posted a net loss of Rs 4,737.56 crore in October-December, 2018-19.

Income was up at Rs 13,338.09 crore as against Rs 11,701.84 crore earlier.

On the NPA divergence, the bank showed a gap of Rs 1,117 crore for 2018-19.

The bank had reported net NPAs at Rs 19,118.95 crore as on March 31, 2019. While the RBI had assessed it at Rs 20,235.95 crore.

This divergence led to an adjusted loss of Rs 6,992.90 crore for 2018-19, while the bank had reported an overall loss of Rs 5,546.90 crore for the previous fiscal.

The provision coverage ratio of the bank as on December 31, 2019 is 77.15 per cent. It was 76.76 per cent by December-end 2018.

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Bank of India, IOB report NPA divergences; losses widen for FY19

State-owned Bank of India and Indian Overseas Bank have reported divergences in their bad loans for the fiscal ended March 2019, resulting into widening of net losses for the year.

Chennai-headquartered Indian Overseas Bank has reported a net non-performing asset (NPA) divergence of Rs 358 crore for 2018-19, due to which the divergence in provisioning came in at Rs 2,208 crore, according to a regulatory filing by the bank.

The bank has an adjusted loss of Rs 5,999.88 crore in the fiscal ended March 2019, higher than Rs 3,737.88 crore reported earlier, due to the divergence.

Banks have to report the divergence in asset classification and provisioning for NPAs as per Risk Assessment Report of RBI subject to certain conditions, which is the gap between the bad loans as declared by the lenders and that assessed by the regulator.

Bank of India on the other hand had a fall in its net NPA divergence by Rs 329 crore for 2018-19, because the NPAs reported by the bank were higher than that assessed by the RBI.

However, the lender's net loss for the year expanded to Rs 6,992.90 crore from Rs 5,546.90 crore reported by the bank due to divergence in provisioning requirement.

The bank's divergence in provisioning for the year was at Rs 1,446 crore, Bank of India said in the regulatory filing.

Earlier this month, market regulator Sebi had put in place tighter disclosure norms, and directed all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving RBI's risk assessment report, rather than waiting to publish the details in their annual financial statements.

Some banks, including Indian Bank, Union Bank of India and Lakshmi Vilas Bank, have already reported their NPA divergences for last fiscal.

The disclosures need to be made in case the banks' additional provisioning for non-performing assets (NPAs) assessed by the RBI exceeds 10 per cent of the reported profit before provisions and contingencies, and if the additional gross NPAs identified by the RBI exceed 15 per cent of the published incremental gross NPAs.

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BoI posts profit in Q2 due to lower provision

State-owned Bank of India (BoI) on Friday reported a net profit of Rs 266.37 crore for the second quarter ending September 30, due to a decline.....

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Bank of India(BOI) Launches new Cash Withdrawal System from ATM

The rate at which frauds happening through ATM cloning and skimming is truly disturbing and its high time security measures are implemented against such frauds. 

The recent video that went viral on Twitter about how cloning mechanism was installed in a Canara Bank ATM pushed Canara Bank to warn their customers about taking correct precautions while withdrawing money. 

ICICI Bank too issued guidelines for its customers about how to stay alert in case of online monetary frauds.

And now, Bank of India has come up with a new way where your debit or credit cards are no longer needed to withdraw cash at ATMs, a QR code is enough!

Read on for more details about this new system that the Bank of India has come up with

Bank of India Launches QR Based Cash Withdrawal System

The Bank of India has introduced a new systemthat does not require ATM cards to withdraw cash anymore. With this, the bank has killed two birds with one stone, one being an attempt at curbing ATM cloning, skimming and ATM-related frauds, the other one promoting card-less cash withdrawals.

The Chairman of Bank of India, G Padmanabhan said, “We believe providing access to cash using a QR code will provide a requisite push to the adaption of QR form factor. Once it becomes interoperable the usage will increase multifold. This also provides the next level of security for ATM transactions as there is no requirement of the card and the PIN.”

AGS Transact Technologies has been given the responsibility of installing this system in every ATM, which will first debut in Mumbai, Delhi and Chennai. This system will be launched across the nation within the next six months. 

SBI has already urged its customers to limit their use of debit cards and use their YONO app for cash withdrawals. 

How Does QR Based Cash Withdrawal System Work?

You can now withdraw cash from an ATM using a QR code from your mobile. Here’s how you can do this:

1. On your ATM screen, there will be a ‘QR Cash’ option. When you select that, two more options will appear: Deposit and Cash Withdrawal. 

2. Select the cash withdrawal option, which will ask you to enter the amount that is needed to be withdrawn. 

3. A QR Code will appear which you will have to scan through the mobile app on your smartphone.

4. Once confirmed, you will be required to insert your M-Pin, after which cash will be dispensed by the machine. 

A maximum limit of Rs. 2000 has been set for cash withdrawals of this type. 

"Bank Of India Asks Customers To Stop Using Debit Cards For Cash Withdrawal, And Use This Instead", 4 out of 5 based on 8 ratings.

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RBI slaps fine on Nine banks due to violating norms

The RBI has imposed penalties on nine commercial banks, including SBI, PNB and BoB, for a host of violations, including delay on the reporting of fraud in the account of Kingfisher Airlines in case of two lenders.

The nine lenders in separate regulatory filings said that the penalties have been imposed on them for delay in reporting of frauds. Public sector lender Punjab National Bank (PNB) said the RBI has imposed a penalty of Rs 50 lakh on it for delay in reporting of fraud in the account of Kingfisher Airlines.

Another state-run lender Oriental Bank of Commerce said that the RBI has imposed a fine of Rs 1.5 crore on it for delay in reporting fraud in the account of Kingfisher Airlines. The aforesaid penalty is required to be paid within 14 days from the date of receipt of the RBI order, the bank added.

United Bank of India and Punjab & Sind Bank said they have been fined 1 crore each by the RBI. State Bank of India (SBI) said the RBI imposed a penalty of Rs 50 lakh on it for non-compliance relating to reporting of frauds. The RBI in exercise of the powers conferred under various sections of the Banking Regulations Act, has imposed a penalty of Rs 50 lakh on the bank for non-compliance with its directions relating to reporting of frauds, it said in a filing.

Bank of Baroda and Federal Bank reported a fine of Rs 50 lakh each on them for delay in reporting fraud in an account.

Corporation Bank and UCO Bank also reported imposition of fines by the RBI for delay in reporting of frauds.

The RBI in a release on Friday had said that it had imposed a fine of Rs 1 crore on Corporation Bank non-compliance with the directions on cyber security framework and frauds classification and reporting.

The central bank in another release on Friday had named seven banks that faced penalties of various amounts for violation of its direction on fraud classification and reporting and opening of current accounts. The RBI slapped a penalty of Rs 2 crore each on Allahabad Bank and Bank of Maharashtra, Rs 1.5 crore each on Bank of Baroda, Bank of India, Indian Overseas Bank and Union Bank of India, and Rs 1 crore penalty on Oriental Bank of Commerce.

A scrutiny was carried out by the RBI in the accounts of the companies of a Group and it was observed that the banks had failed to comply with provisions of one or more of the directions issued by the RBI, the release had said. Based on the findings of the scrutiny, notices were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions.

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Bank of India (BOI) reports 156% jump in Q1 result

Bank of India reported a 156 per cent jump in first quarter standalone net profit, on the back of robust growth in other income and lower provisioning burden.

The public sector bank’s net profit rose to ₹243 crore in the reporting quarter against ₹95 crore in the year-ago period.

The bank’s net interest income edged up 4 per cent year-on-year (y-o-y) to ₹3,485 crore. Other income soared 93 per cent y-o-y to ₹1,195 crore. The loan loss provisions declined 17 per cent y-o-y to ₹1873 crore.

During the reporting quarter Gross Non-Performing Assets (GNPAs) increased by ₹1407 crore to ₹62,068 crore. The bad loans pressure continued with GNPAs rising to 16.50 per cent as at June-end 2019 against 15.84 per cent as at March-end 2019.

Net NPAs nudged up to 5.79 per cent as at June-end 2019 from 5.61 per cent as at March-end 2019. Provision coverage ratio improved to 77.18 per cent from 66.67 per cent as at June-end 2018.

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Bank of India(BOI) back in the black in Q4FY19

Robust growth in net interest income and a sharp decline in loan-loss provisions helped Bank of India (BoI) report a turnaround performance, posting a net profit of ₹252 crore in the fourth quarter, against a net loss of ₹3,969 crore in the year-ago quarter.

In the reporting quarter, the public sector bank reported a 58 per cent year-on-year (y-o-y) jump in net interest income at ₹4,044 crore.

Total non-interest income (including commission, exchange and brokerage, profit from sale of investments, profit from exchange transactions, recovery in written-off accounts, and other non-interest income) was up 17 per cent y-o-y at ₹1,603 crore.

Provisioning

Loan-loss provisions declined sharply to ₹1,503 crore (₹6,699 crore in the year-ago quarter).

Gross non-performing assets fell to 15.84 per cent of gross advances, against 16.31 per cent in the preceding quarter. Net non-performing assets declined to 5.61 per cent of net advances, against 5.87 per cent in the preceding quarter.

“Bank of India has come back to the growth-and-profit path, and this has been possible by progress and improvement every quarter. We are in a better position vis-a-vis asset quality, current account, savings account (CASA), profit, net interest income, and capital. So, we are in a better position to grow and give better returns to the stakeholders,” said Dinabandhu Mohapatra, MD and CEO.

Mohapatra underscored that many big accounts are at the end of the resolution process at the National Company Law Tribunal (NCLT), and that the bank has provided around 100 per cent provision in all the NCLT accounts (list 1 and 2).

“And when these accounts will be resolved, we are expecting good write-back to our profit….Going forward, we will be showing good improvement in recovery. So, as a result, we will be in a position to grow; maybe, if macro-economic conditions improve, we can target to grow (loans) around 15 per cent in future,” he added.

Impaired assets

To clean-up its balance sheet further, BoI will be putting ₹30,000 crore worth of impaired assets, including those referred to the NCLT, on sale in FY20 to asset reconstruction companies.

In FY2019, it had put assets aggregating ₹17,000 crore on the block and recovered ₹1,700 crore.

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Round 2 of PSB merger: PNB, Union bank and BoI may get a call

The government is soon likely to invite select lenders for discussion on a second round of merger in public sector banks, according to a finance ministry official.

The lenders to be called may include Punjab National Bank (PNB), Union Bank of India and Bank of India (BoI).

We wouldn’t like to wait for too long,” said the official, indicating that some merger activity is on the cards around second or third quarter of the current fiscal year. “If the banks are not able to give options then the alternate mechanism (AM) group can make suggestions.”

In October 2018, the government had proposed the merger of three banks — Bank of Baroda, Vijaya Bank and Dena Bank — to create the country’s third-biggest lender through alternate mechanism. Both Vijaya and Dena were amalgamated with BoB on April 1, 2019.

“It need not be a tripartite merger again. We will be looking at various combinations. It has to be organic, besides we will like some of these large banks to further consolidate their balance sheets in the first two quarters,” the official said

Another government official, however, argued that it was not the opportune time for merger in state-run banks. “Bank of India has just come out of the Reserve Bank of India PCA (prompt corrective action) framework.

Union Bank of India and Punjab National Bank are also in early recovery stage,” he said.

In February 2019, the Reserve Bank of India had pulled out Bank of India, Oriental Bank of Commerce and Bank of Maharashtra from its PCA framework, which imposes certain lending restrictions on financially weak banks.

A senior executive with a PSU bank said smaller banks have begun consolidating their operations in the same geography by closing overlapping branches and focusing on niche areas.

“Merger is not the antidote for every banking woe. The government should not force mergers only to create toobig-to-fail structures,” he said.

In an interaction with ET last week, Punjab National Bank managing director and chief executive Sunil Mehta had said that his bank has now made a turnaround and can consider offers for acquiring other lenders. “It all depends on the offers,” he said.

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Bank of India(BoI) hopeful of Rs. 1,800-crore write-back

In the run-up to the close of financial year 2019, Bank of India is expecting a provisioning write-back of more than ₹1,800 crore from the resolution of Essar Steel assets and an inflow of ₹400-500 crore from the sale of non-core assets.

The public sector bank has made 100 per cent provisioning towards the Essar Steel account. Bank of India (BoI) MD and CEO Dinabandhu Mohapatra said: “Our bank’s provision coverage ratio (PCR), at 76.6 per cent, is the highest in the banking industry. We are quite hopeful of a write-back of more than ₹1,800 crore from the resolution of this account.”

BoI’s non-core assets include STCI Finance and Star Union Dai-ichi Life Insurance Company. The bank’s non-core investments include Central Depository Services (India), and ASREC (India), an asset reconstruction company.

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First three PSU Banks which are removed from RBI's PCA list

A Reserve Bank of India (RBI) panel has decided to remove both Bank of India , Bank of Maharashtra and Oriental Bank of Commerce from its prompt corrective action plan (PCA) for state-owned banks that had high levels of bad debt and inadequate capital, a source directly aware of the development told Reuters on Thursday.

The source, who asked not to be named as the discussions are private, said the move follows improvements in the asset quality and capital ratios of both banks.

The RBI’s board for financial supervision took the decision at its meeting on Thursday after reviewing the December quarter performance of all banks on the PCA list, the source said.

In case of Oriental Bank of Commerce, it may also be removed from the list pending the outcome of a technical clarification from the bank, the source added. the net NPA has come down to less than 6 per cent as the government has infused sufficient capital, it said. Hence, it has been decided to remove the restrictions placed on Oriental Bank of Commerce (OBC) under PCA framework, subject to certain conditions and close monitoring, the apex bank added. 

The RBI put 11 state-owned lenders on the PCA list in the past few years. As a result, it barred them from issuing fresh big-ticket loans and expanding their operations, as well as putting their financial performance under close scrutiny.

RBI Press Release:-

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Bank of India(BOI) Q3 result, loss double

Public sector lender Bank of India (BOI) saw its net loss for the December quarter double to Rs 4,738 crore. This was against a loss of Rs 2,341 crore a year ago and Rs 1,156 crore in previous September quarter. 

The gross non performing assets (GNPA) stood at 16.31 per cent as on December 2018, against 16.93 per cent as on December 2017 and 16.36 per cent as on September 2018.

The bank's provisions for non performing assets rose to Rs 9,179 crore during the December quarter against Rs 4373 crore in the year-ago quarter. 

The bank said that the bank's profit was affected by additional provisions for certain NPA accounts. This includes 100 per cent provision on its exposure to NCLT 1 & 2 accounts of Rs 4335 crore and Rs 2604 crore respectively.  

The bank's provision coverage ratio(PCR) improved during the quarter to 76.76 per cent from 56.96 per cent as on December 2017. 

"Our PCR is the highest in the banking industry. We have proactive provided for the NCLT account and secured the profits and future for the bank," said Dinabandhu Mohapatra, MD & CEO, Bank of India.

Also read- Q3FY19 Results of all Public & Private Sector banks in India 

The bank said that it is in constant communication with the central bank regarding the prompt corrective action(PCA) framework. However, it is a regualtory call and the bank would work towards improving return on assets to get out of the framework. 

The bank is expecting a write off of Rs 2,600 crore from the NCLT accounts in the coming March quarter. Mohapatra said that the recent Supreme Court verdict on the Insolvency and Bankruptcy code would lead to quicker resolution of NPAs and the bank is prepared to sell the assets to asset reconstruction companies if resolution fails. The bank has sold Rs 3, 248 crore of assets during the December quarter and has identified assets worth Rs 12,000 crore for sale for the coming quarter. 

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