Bank of India: Q3FY14 Result Review

Bank of India announced its financial results yesterday for the quarter and nine-month period ended 31 December, 2013. During the quarter, the global business of the Bank reached Rs. 810687 crore, showing a Y-o-Y growth of 28.79%. The global deposits stood at Rs. 454140 crore, up by 30.08% as compared to the corresponding quarter of previous year. The global advances too showed a rise of 27.18% to reach Rs. 356547 crore in the current quarter. The Current Account and Saving Account (CASA) deposit grew 15.90% at Rs. 101957 crore, out of which Rs. 82138 crore was the Saving Account deposit.

The operating profit increased from Rs. 1856 crore in Q3FY13 to Rs. 2144 crore in Q3FY14, registering a growth of 15.52%. The Net Profit for the quarter disappointed the streets, slipping down by 27% to Rs. 586 crore on Y-o-Y basis and 5.78% on sequential basis. However, the net profit for the nine-month period increased from Rs. 1993 crore in December 2012 to Rs. 2172 crore in December 2013, up 8.98%.

Gross NPA Ratio improved from 2.93% in the previous quarter to 2.81% in the current quarter and 3.08% in the same quarter last year. Net NPA ratio improved from 1.85% in September quarter to 1.75% in the current quarter. The Provision Coverage Ratio improved to 63.77% as on December 2013 as against 60.74% in the corresponding quarter last year and 63.29% in September 2013. The Standard Restructured Portfolio as percentage of Advances decreased from 6.88% in the previous quarter of September 2013 to 6.14% in the current quarter. The Net Interest Income (NII) for the quarter increased from Rs. 2308 crore in Q3FY13 to Rs. 2719 crore in Q3FY14, up 17.81%. The Net Interest Margin (NIM) on the domestic front stood at 2.89 as on December 2013 as against 2.73 as on December 2012, while on the foreign front it was 1.10 as on December 2013 as comapred to 1.27 last year. The Non Interest Income registered a growth of 17.08% on Y-o-Y basis to reach Rs. 1097 crore in the current quarter as compared to Rs. 937 crore in the corresponding quarter last fiscal.

The Global Credit-Deposit (CD) Ratio as on 31 December, 2013 stood at Rs 78.51 crore as against Rs. 80.30 crore on 31 December, 2012. The total Retail Credit as on 31 December, 2013 was registered at Rs. 25527 crore, a Y-o-Y growth of 22.06%. The total Standard Restructured Assets as on 31 December, 2013 on the global front stood at RS. 16394 crore, out of which Rs. 4357 crore being CDR restructuring, Rs. 645 crore being SME Debt restructuring and Rs. 11392 crore being other restructuring. Slippages during the quarter were higher at Rs. 1747 crore as compared to Rs. 1469 crore in the previous quarter of September 2013.

The domestic Return on Assets (RoA) as on 31 December, 2013 was at 0.60 as compared to 0.70 last year, while the foreign RoA remained stable at 0.44. The Return on Equity (RoE) stood at 12.60 in December 2013 as against 13.45 in December 2012. The number od domestic branches increased from 4292 in March 2013 to 4522 in December 2013. The number of ATMs increased from 2133 in March 2013 to 3362 in December 2013.

The Bank's strategy going forward is to emphasize on CASA growth, expansion of SME, Retail and Rural business. The Bank also wishes to focus on Credit Monitoring and Recovery in NPA along with focused attention on Human Resources.