Bank of India(BoI) Q1 net profit down 14.7%

Bank of India's (BoI's) net profit for June 2021 quarter fell by 14.7 per cent on a year-on-year basis, to Rs 720 crore on higher provisions for bad loans and standard assets.

It had posted a net profit of Rs 844 crore in the same quarter last year (Q1FY21).

The bank said in a statement its net interest income (NII) fell in Q1FY22 to Rs 3,145 crore from Rs 3,481 crore in the quarter ended June 2020 (Q1FY21). Net interest margin fell to 2.16 per cent for Q1 against 2.48 per cent in the year-ago period.

The non-interest income rose 39.25 per cent YoY to Rs 2,376 crore, from Rs 1,707 crore in Q1FY21.

Asset quality profile improved with gross non-performing assets down to 13.51 per cent in June, from 13.91 per cent last year. Net NPA also fell to 3.35 per cent, from 3.58 per cent in June 2020. Its provision coverage ratio improved to 86.17 per cent in June 2021, from 84.87 per cent a year ago.

Its provisions for bad and non-performing assets rose to 873 crore in Q1Fy22, as against Rs 767 crore in Q1FY21. Those for standard assets rose to Rs 898 crore from Rs 759 crore.

Advances growth was flat to Rs 4.15 trillion. The retail loan portfolio rose by 10.61 per cent (y.o.y) to Rs 1.25 trillion as of June 2021.

Its deposits grew from Rs 5.95 trillion in June 2020 per cent to Rs 6.23 trillion in June 2021.

The capital adequacy ratio stood at 15.07 per cent in June 2021 up from 12.76 per cent at the end of June 2021.

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Bank of India posts Rs 250 crore profit in Q4

State-owned Bank of India has on Friday reported Rs 250 crore profit for the March quarter compared to a loss of Rs 3571 crore in the year ago period, thanks to lower provisions against bad loans.

The bank's net interest margin, a key profitability parameter, has fallen to 2.01% for the quarter as against 2.90%.

Operating profit dipped 21% at Rs 2094 crore from Rs 2653 crore while interest income fell 9% at Rs 9327 crore over the year-ago period's Rs 10,528 crore, the bank said in a regulatory filing.

About 4.5 times lower provisions including those to cover bad loans saved the day for the bank. The bank made provisions of Rs 1831 crore during the quarter against Rs 8142 crore last time with improvement in asset quality over the one year period. Gross non-performing assets ratio stood at 13.77% at the end of March, compared with 14.78% a year back. The ratio however rose from December 2020's 13.25%.

Provisions coverage ratio however remained healthy at 86.24% compared with 83.75% over the same period.

The bank's advances shrunk 1.5% to Rs 4.1 lakh crore as of end of March, on account of contraction in overseas lending to Rs 48,075 crore from Rs 58,852 crore while dometic lending grew a modest 1.35 to Rs 3.6 lakh crore. The muted credit growth is largely due to 15% fall in corporate loan demand.

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Government is considering mid-sized to small banks for its first round of privatisation.

Government has shortlisted four mid-sized state-run banks for privatization, under a new push to sell state assets and shore up government revenues, three government sources said.

Privatisation of the banking sector, which is dominated by state-run behemoths with hundreds of thousands of employees, is politically risky because it could put jobs at risk but Prime Minister Narendra Modi's administration aims to make a start with second-tier banks.

The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India, two officials told Reuters on condition of anonymity as the matter is not yet public.

Two of those banks will be selected for sale in the 2021/2022 financial year which begins in April, the officials said. The shortlist has not previously been reported.

The government is considering mid-sized to small banks for its first round of privatisation to test the waters. In the coming years it could also look at some of the country's bigger banks, the officials said.

The government, however, will continue to hold a majority stake in India's largest lender State Bank of India, which is seen as a 'strategic bank' for implementing initiatives such as expanding rural credit.

A finance ministry spokesman declined to comment on the matter.

India's deepest economic contraction on record caused by the pandemic is driving the push for bolder reforms, economists say.

Government also wants to overhaul a banking sector reeling under a heavy load of non-performing assets, which are likely to rise further once banks are allowed to categorise loans that soured during the pandemic as bad.

PM Modi's office initially wanted four banks to be put up for sale in the coming fiscal year, but officials have advised caution fearing resistance from unions representing the employees.

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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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