Bank of India registered a ‘degrowth’ in total business for the quarter ending December 2017, due to its conscious decision for Consolidation, Cleansing of Books and Conservation of Capital. The Bank’s Global Business stood at Rs 9,05,541 crore in this quarter, as against Rs 9,29,656 in the same period last year.
Dinabandhu Mohapatra, MD/CEO, Bank of India said here that to rationalize level of advances in line with the Capital, the Bank had to curtail its overseas advances by Rs 13,634 crore and resort to placement of Inter Bank Participation Certificate (IBPC) with other banks against its advances assets amounting to Rs 8312 crore. Gross Advances declined to Rs 3,79,538 crore on December 31, 2017 from Rs 3,87,028 crore by December 2016 because of rebalancing of exposure in overseas operation.
However, CASA ratio improved from 39.84% (Rs 1,62,770 crore) in March 2017 to 40.36% (Rs 1,65,621 crores) in December 2017 due to the bank’s various initiatives.
One-time classification of certain assets by RBI in their Risk Based Supervision/Risk Assessment led to the bank’s NPA ratios moved up in the current quarter with Gross NPA increased from 12.62% (Rs 49307 crore) in September 2017 to 16.93% (Rs 64249 crore) in December 2017, and Net NPA ratio up from 6.47% (Sept 2017) to 10.29% (Dec 2017). NPAs of its foreign branches increased from Rs 9,635 crore (Sept 2017) to Rs 20,775 crore (Dec 2017). However, out of Rs 9405 crore of lending against ‘Stand by Letter of Credit’ (SBLC) marked as NPAs, the bank had recovered Rs 4751 crore at present and was confident of recouping the remaining amount by March 2018, he said.
The bank’s Operating Profits – Rs 1,354 crore for Q3-2017/18 as against Rs 2458 crore for Q3 2016/17 –were impacted by decline in interest income due to NPAs and lower treasury income on account of hardening of yield rate. The bank posted a lesser Net Profit of Rs 2,341.23 crore for Q3-FY2017-18 against profit of Rs 101.73 crore (Q3 2016-17) due to provisioning for bad debts and treasury (MTM) losses.
Mohapatra said Provision Coverage ratio is 67% and most of big assets under NCLT are expected to be resolved in Q1 2019, resulting in write back in such accounts. During Q3, the bank sold Assets to others under IBPC, resulting in reduction in topline advances by Rs 8312 crore. The bank has approved flexible structuring in 20 projects under 5/25 Flexible Structuring Scheme, which has been implemented in 16 accounts with outstanding of Rs 5,690 crores. Total 45 SDR cases were identified of which 39 accounts were approved with SDR implemented in eight such accounts and the bank’s exposure being Rs 2,494 crores.
