Boi’s pre-tax profit jumps fourfold

Bank of India (BOI) on Monday reported a fourfold jump in profit before tax (PBT) to ~1,332.45 crore in the quarter ended June (Q1FY21) owing to rise in other income and lower provisions and contingencies. The public sector bank had posted PBT of ~359.3 crore in the June quarter last financial year.

The lender's net profit for the reporting quarter rose to ~843.6 crore from net profit of ~242.6 crore in the year-ago period.

The bank’s stock closed 2.02 per cent higher at ~48.05 apiece on the BSE. The bank’s capital adequacy ratio stood at 12.76 per cent as of June 30.

The net interest income (NII) remained almost flat year on year at ~3,481.1 crore in Q1FY21, from ~3,485.4 crore in the same quarter a year ago.

Net interest margin (NIM) for domestic operations fell to 2.73 per cent in June 2020 against 3.03 per cent in the year-ago month. Bank’s Managing Director and Chief Executive A K Das said the decline in NIM was due to factors like somewhat muted growth in loan book and efforts towards effective rate transmission. However, the other income comprising fees and commissions rose to ~1,707.2 crore in Q1FY21 from ~1,194.7 crore in Q1FY20.

The bank has estimated the impact of such wage revision arrears amounting ~1,461.63 crore till June 30, 2020. It made additional provision of ~161.63 crore in Q1FY21. The provisions, including for non-performing assets, and contingencies dipped to ~1,512.07 crore in the first quarter of FY21, from ~1,911.18 crore in Q1FY20.

The lender made Covid-19 provisions of ~620.30 crore in the June quarter for Special Mention Accounts where moratorium was extended, it said in a BSE filing.

The bank held the total provision of ~1,034.78 crore for the Covid-19 pandemic. The provisions are higher than what is required by the RBI’S guidelines to cushion the balance sheet from the impact of pandemic.