Bank of India posts 10% profit growth despite increased provisions for bad loans

Bank of India Q1 2024: Bank of India, a state-owned financial institution, announced a 10 per cent increase in its net profit for the April-June quarter, reaching Rs 1,703 crore, compared to Rs 1,551 crore in the same period last year. The profit growth was constrained by a rise in provisions for bad loans.

In the reporting quarter, the bank's core net interest income rose by 6 per cent to Rs 6,275 crore. This increase was supported by a nearly 16 per cent rise in advances and a marginal expansion in net interest margin to 3.07 per cent, up by 0.04 per cent.

However, non-interest income experienced a decline, falling to Rs 1,302 crore from Rs 1,462 crore in the previous quarter. The deposit growth for the bank was recorded at 9.74 per cent during this period.

Credit expansion was robust across various sectors, with retail and agriculture loans growing over 20 per cent and the MSME book expanding by 13 per cent. The bank's gross non-performing assets (GNPA) ratio improved to 4.62 per cent by the end of the quarter.

One of the significant factors impacting earnings growth was the increase in provisions for bad loans, which rose to Rs 1,215 crore from Rs 776 crore in the corresponding quarter of the previous year.

The bank's overall capital adequacy ratio stood at 16.18 per cent, with a core capital buffer of 13.62 per cent.

(With PTI inputs.)