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Informist, Monday, Nov. 11, 2024

 

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--Bank of India: Aim domestic credit growth at 14% FY25 
--Bank of India: Aim domestic deposit growth at 13% FY25 
--Bank of India: Garnering low-cost deposits to manage NIM to be key focus
--Bank of India: Of Jul-Sept provisions, INR 2 bln marked for 1 PSU NPA acct 
--Bank of India: Expect global NIM at 2.90% by March end 
--Bank of India: PSU NPA acct for which provision made from telecom sector
--Bank of India: PSU NPA acct for which provision made amounts to INR 10 bln
--Bank of India: To raise tier-I bonds worth INR 25 bln in Oct-Mar
--Bank of India: To raise INR 50 bln via infra bond in Oct-Mar
--Bank of India: CD ratio very modest compared to peers 

 

By Kshipra Petkar and Ashna Mariam George

 

MUMBAI – Bank of India's special mention accounts-2 rose in the Jul-Sept quarter as three to four state public sector accounts defaulted on their payments, Managing Director Rajneesh Karnatak said in a press conference post-earnings announcement Monday. However, he added that the overall special mention accounts portfolio is quite within control.

 

SMA-2 stands for Special Mention Account, which is a sub-asset category used by banks to identify accounts where the principal or interest payment is overdue by 61–90 days. Bank of India's SMA-2 grew to INR 23.70 billion in Jul-Sept from INR 10.42 billion a quarter ago and INR 12.20 billion a year ago.

 

"If you remove that public sector state enterprise, the overall SMA number would be even less than 1% of the total standard advances," Karnatak said. Due to this, the bank had to increase the provisions as well.

 

In the September quarter, the bank's provisions rose 27.46% on year to INR 10.43 billion, of which non-performing assets provisions were up 110.54% on year at INR 14.27 billion. Karnatak said that out of the total provisions, INR 2 billion were kept aside for one public sector account.

 

Fresh slippages of the bank increased to INR 23.57 billion in Jul-Sept from INR 15.60 billion a year ago and INR 16.89 billion a quarter ago. "Our total additions (slippages) have gone up in the Jul-Sept quarter due to one telecom account of INR 10 billion falling in to NPA," Karnatak said.

 

Bank of India has kept its guidance for domestic credit growth and domestic deposit growth unchanged at 14% and 13% respectively, for the rest of the current financial year, Karnatak. 

 

"The key focus area will be low-cost deposit mobilisations for protecting our name and increasing high-yielding advances for consistent growth in business with emphasis on digital initiatives, improvement in asset quality, and arresting slippages," Karnatak said. As on Sept. 30, the bank's domestic advances were up 15.03% on year at INR 5.21 trillion and domestic deposits were up 12.33% on year at INR 6.73 trillion. 

 

Bank of India sees global net interest margin at 2.90% by March-end. In Jul-Sept, the global net interest margin was 2.82%, lower than 3.07% a quarter ago. Domestic NIM was 3.14%. Karnatak said the bank's credit-deposit ratio, which is currently at 80.23%, is "very modest" compared to its peers.

 

The bank plans to raise up to INR 25 billion through tier-I bonds and INR 50 billion through infrastructure bonds in the second half of the current financial year.

 

On Monday, shares of the bank closed 0.5% higher at INR 112.20 on the National Stock Exchange.  End

 

Edited by Ashish Shirke

 

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