The state-run Bank of India on Tuesday reported a 142.31 percent increase in stand-alone profit after tax (PAT) of Rs 606 crore in the quarter ended March 2022 on the back of higher net interest income (NII) and improvement in the quality of the assets.
This compares to a PAT of Rs 250 crore in the same period of the previous fiscal year.
For the full year 2021-22, the lender reported a 57.60 percent increase in net profit of Rs 3,405 crore from Rs 2,160 crore in FY21.
Speaking to reporters, the bank’s general manager and CEO AK Das said, “Asset quality has continued to improve with a reduction in gross NPAs, both in amount and percentage.”
He said the bank’s emphasis was on advances growth rather than deposit growth. It also emphasized outreach campaigns for business growth and building relationships with customers in the previous fiscal year.
Net interest income (NII) rose 35.77 percent to Rs 3,986 crore in Q4 FY22, from Rs 2,936 crore in the same period of the previous fiscal year.
The net interest margin (NIM) improved from 2.01 percent to 2.58 percent.
Gross non-performing assets (GNPAs) fell 19.33 percent to Rs 45,605 crore in March 2022 from Rs 56,535 crore in March 2021. The GNPA ratio fell from 13.77 percent to 9.98 percent.
The net NPA ratio was 2.34 percent against 3.35 percent.
Mr Das said gross NPA is expected to be below 8 percent in March 2023.
He further said that the bank’s exposure to Future Group is about Rs 1,045 crore and it has provisioned 100 percent for the account. A 50 percent provision has been made for Srei Group, with an exposure of Rs 963 crore.
The bank expects credit growth of approximately 10-12 percent for the current financial year.
Das said corporate credit growth was muted in FY22.
For the entire past year, the lender has sanctioned more than Rs 70,000 crore but the availability was less around Rs 29,000 crore. Even the use of overdraft (OD) limits was about 68-69 percent.
“We believe that this time apart from MSME, mid-cap segments, the business segment will get extra focus, which will be helped by the fact that the government has come up with many initiatives such as the Rs 7.5 lakh crore capex plan, which will have multiplier effects and create new demand.
“We also have enough capital to fund corporate sector growth. I think 10-12 percent (credit growth) is the bare minimum we can expect this year,” Das said.
As of March 31, 2022, the bank’s solvency ratio (CRAR) was 17.04 percent, compared to 14.93 percent in March 2021.
On capital raising plans, Mr Das said the lender can raise Rs 2,500 crore this year.
“The government has an 81 per cent stake in the bank, which we intend to reduce to 75 per cent. We have obtained principal approval from the board of directors for raising about Rs 2,500 crore in this fiscal year,” he said. , adding the fundraiser will take place through the Qualified Institutional Placement (QIP) or Follow-on Public Offer (FPO) route.