Bank of India’s Bottomline Soars In September 2013 Quarter

For the quarter ended September 2013, Bank of India (BoI) reported a healthy operating performance which beat the street’s expectations. The bank reported a 106.99% rise in net profits on a year-on-year basis to Rs 621.77 crore.

BoI’s Net Interest Income (NII) grew 15.08% YoY to Rs 2527.16 crore during Q2FY14 against Rs 2195.96 crore from the corresponding period of the previous fiscal. Its Non-Interest Income grew to Rs 1100.26 crore, marking a year-on-year growth of 23.06% from Rs 894.09 crore in Q2FY12.

The bank’s Gross NPAs came in at Rs 9880.07 crore against Rs 8898.6 crore in Q2FY13 and Rs 9413.45 crore in Q1FY14, a growth of 11.03% YoY and 4.96% QoQ.  The ratio of its net NPAs to net advances stood at 1.85% as on September 30, 2013, as against 2.1% as on June 30, 2013 and 2.04% as on September 30, 2012. The ratio of its gross NPAs to gross advances stood at 2.93% as on September 30, 2013 compared to 3.04% as on June 30, 2013, down by 11 basis points QoQ and down by 49 bps YoY from 3.42% as on September 30, 2012. The bank's Capital Adequacy Ratio (CAR) as per the Basel III norms stood at 10.77% as of the September 2013 quarter compared to 10.66% in the June quarter this year.

The bank’s stupendous profits for the quarter were driven by improvement in its asset quality and other income on a YoY basis. The shares of the bank gained 21.26% to trade at Rs 209.90 on October 31, the day of the results. All factors considered (tightened liquidity, a tough macro-economic environment), the bank has come out with an impressive set of numbers for the quarter. It makes good investment sense to stay invested in this counter.