Bank of India (BoI) on Monday reported a net loss of Rs 2,341 crore for the December quarter of FY18, owing to lower other income and higher provisions. Other income fell 41 per cent y-o-y, while its provisions more than doubled y-o-y to Rs 4,900 crore in Q3FY18. While the fall in other income was primarily because of its meagre income of Rs 81 crore from sale of investments in Q3, provisions rose after the RBI report on bad loan divergences for FY17.
Net interest margin (NIM) — a key measure of profitability — fell 33 bps y-o-y and 27 bps sequentially to 1.88 per cent in Q3. Net interest income (NII) — difference between interest earned and expended —stood at Rs 2,501 crore, down 13 per cent y-o-y.
MD and CEO Dinabandhu Mohapatra said it was a special situation, and therefore, the bank’s numbers should not be the benchmark for future performance. “In view of the last quarters’ good performances and excluding this special situation, we are quite hopeful that things are on the right track,” Mohapatra said
RBI had found that the bank had under-reported gross NPAs of Rs 14,057 crore in FY17. The subsequent difference in provisions was Rs 4,350 crore. The bank said of the total gross NPAs, Rs 9,405 crore was from standby letters of credit issued by other banks for which BoI is not required to make any additional provisions in the quarter.
Mohapatra said that in 20 days, the bank has recovered around Rs 5,000 crore (of Rs 9,405 crore) and has already issued notices for the rest. FE