Bank of India's Q1 results: Profit surges 32% to ₹2,252cr
What's the story
Bank of India has reported a 32.2% year-on-year (YoY) increase in its consolidated net profit for the June quarter. The bank's net profit stood at ₹2,252 crore, which is up from ₹1,703 crore in the same period last year. The growth was driven by a surge in advances across retail, MSME, and overseas segments.
Financial performance
Impressive growth in advances and deposits
The bank witnessed a 12.02% YoY growth in global advances, with domestic loans rising by 11.24%. Overseas advances grew by 16.34%, while retail and MSME loans expanded by 20% and 17%, respectively. Agriculture credit also saw a healthy growth of 12%. Deposits surged by 9.07% YoY, with domestic deposits up by an impressive 9.62%.
Financial metrics
NII falls by 3.3% YoY
Despite the impressive growth in advances and deposits, the bank's net interest income (NII) fell by 3.3% YoY to ₹6,068 crore from ₹6,276 crore a year ago. This has raised concerns over margin pressure. However, the operating profit for the quarter stood at ₹4,009 crore, marking a 9% increase YoY.
Asset quality
Improvement in asset quality over time
The bank's asset quality showed a sequential moderation with gross non-performing assets (GNPA) at 2.92%. This is an improvement of 170 basis points YoY but a slight jump from 2.89% in the March quarter. However, net NPA declined to 0.75% from 0.82% sequentially, indicating an improvement in asset quality over time.
Digital growth
Healthy return ratios and digital growth
The bank reported healthy return ratios with return on assets (ROA) at 0.82% and return on equity (ROE) at 13.55% for the quarter. Credit cost improved by 17bps YoY to 0.68%, while provision coverage ratio rose to a high of 92.94%. The bank also highlighted its digital growth, saying over one crore customers have been onboarded through its mobile app, with digital transactions accounting for a whopping 95.4% of total transactions.