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Bank of India turns around in Q1 on lower NPAs

Thursday, August 10, 2017

State-owned Bank of India (BOI) swung into black by registering a standalone net profit of Rs 87.71 crore for the first quarter ended June as bad loans were brought down year-on-year. The bank had reported a net loss of Rs 741.36 crore in the April-June quarter of previous fiscal due to bad assets and higher provisioning to cover it.

Compared sequentially also, the performance has been good as there was a net loss of Rs 1,045.54 crore on bank's balance sheet during March quarter of previous fiscal, the bank said in a regulatory filing.

While for the full year 2016-17, there was a net loss of Rs 1,558.34 crore on its books. Earnings-wise, bank's total income during April-June quarter of 2017-18 increased to Rs 11,106.61 crore from Rs 10,664.36 crore in the same period a year earlier.

The bank improved on its asset front with gross non- performing assets falling to 13.05% of the gross advances as on June 30, 2017 from 13.38% at the end- June 2016. Net NPAs or bad loans also fell to 6.70% of the net advances by June end this year, as against 7.78% a year ago.

Thus, provisions to cover bad loans came down to Rs 2,245.28 crore for June quarter, compared to Rs 2,770.19 crore, which the bank had parked for the first quarter of 2016-17. "In terms of RBI circular,...The board of directors of the bank has approved standard assets provision of 0.10% over and above the regulatory minimum in respect of bank's advances pertaining to textiles, iron & steel and telecommunications sectors. Accordingly, an additional provision of Rs 13.23 crore has been made," the bank said.

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