BoI's Q3 net profit rises 12% YoY to Rs 1,151 cr on improvement in NIM

In a filing with BSE, BoI said its net interest income (NII) was up 64 per cent YoY in Q3 to Rs 5,596 crore

Bank of India's (BoI's) net profit rose by 12 per cent year-on-year (YoY) to Rs 1,151 crore during the quarter ended December (Q3 of FY23) on the back of an improvement in net interest margin (NIM).

The Mumbai-based public sector lender had posted a net profit of Rs 1,027 crore in Q3 of FY22. Sequentially, the net profit was 20 per cent higher in Q3FY23 than in Q2FY23 when the figure stood at Rs 960 crore.

The bank's stock closed 4.55 per cent lower at Rs 93.35 per share on the BSE on Tuesday.

Its total capital adequacy ratio (CAR) stood at 15.6 per cent in December 2022, much above regulatory requirements. Shankar Sen, its chief financial officer, said banks raised Rs 1,500 crore in capital through additional tier I bonds in Q3Fy23. It is yet to review the possibility of raising equity capital through Qualified Institutional Placement (QIP) and will explore it when we find it conducive to hit the market.  

BoI said its net interest income (NII) was up 64 per cent YoY to Rs 5,596 crore in Q3Fy23. Sequentially, NII rose from Rs 5,083 crore in Q2FY23. Its Net Interest Margin (NIM) improved to 3.28 per cent in Q3 from 2.27 per cent in Q3FY22. Sequentially, NIM rose from 3.04 per cent in Q2FY23.

On outlook for NIMs, A K Sen, managing director and chief executive, BOI said some amount of moderation is likely as the deposits get repriced. The NIMs are expected to be in the range of 3.25-3.5 per cent.  

However, the lender's non-interest income was down by 21.96 per cent YoY to Rs 1,432 crore during the quarter under review. Sequentially, it rose marginally from Rs 1,417 crore during the quarter ended September 2022.

The profit from sale and revaluation of Investments declined sharply to Rs 115 crore in Q3FY23 from Rs 210 crore a year ago. The profit from exchange transactions halved to Rs 243 crore from Rs 577 crore a year ago.

Bank MD & CEO said recoveries from written-off accounts, which are part of non-interest income, were muted in this quarter compared to previous two quarters which the bank will try to make in the fourth quarter. It was focussing more on commissions and service charges and sale of third party products.

The asset quality profile improved with gross non-performing assets (GNPAs) at 7.66 per cent in December 2022, compared with 10.46 per cent a year ago. Sequentially, GNPAs were down from 8.51 per cent in September 2022, BOI said.
 

Bank has guided for bringing down GNPA below by end of fourth quarter (Q4Fy23).

Net NPAs dipped to 1.61 per cent from 2.66 per cent a year ago. Sequentially, they improved from 1.92 per cent in July-September 2022.

The provision coverage ratio (PCR) rose to 90.27 per cent for the quarter under review from 86.86 per cent a year ago. Sequentially, it improved from 88.96 per cent in July-September 2022.

On the business expansion front, the bank's loan book grew by 16.08 per cent YoY to Rs 5.07 trillion for the third quarter ended December 2022.

The deposits grew by 4.91 per cent YoY to Rs 6.53 trillion in October-December 2022.
 

In media interaction after Q3Fy23, bank guided for credit to grow by 11-12 per cent and deposits by 7.0 per cent in Fy23. The share of low-cost money, current account, and savings account (CASA) deposits rose marginally to 44.56 per cent at the end of December 2022 from 44.12 per cent in July-September 2022 and 44.07 per cent a year ago.