Analyst Concall
Bank of India sees higher disbursals aid NIM, NII in Oct-Mar
This story was originally published at 21:15 IST on 12 November 2024
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--Bank of India: Better disbursal, credit growth to aid NIM, NII in Oct-Mar
--Bank of India: See gross recovery at INR 70 bln in FY25
--Bank of India: Budgeted INR 2 bln INR 3 bln for IT spend in Oct-Mar
--Bank of India: See total business touching INR 18 tln by Mar 2027
--Bank of India: See total business touching INR 32 tln by Mar 2031
MUMBAI – The management of Bank of India expects rise in credit growth and higher disbursals to aid net interest margin and net interest income in Oct-Mar. In the quarter ended September, the lender's net interest margin fell to 3.14% from 3.47% a year ago and 3.42% a quarter ago due to increase in cost of funds. Net interest income for the quarter rose a mere 4% to INR 59.86 billion.
Global advances of the bank in the quarter ended September were at INR 6.21 trillion, a growth of 14.5% on a yearly basis.
Bank of India has projected credit growth for the current financial year at 14%. The state-owned bank is looking at disbursals worth INR 700 billion in retail, agriculture, micro, small and medium enterprises, together known as the RAM and corporate segment. Of this, around INR 150 billion will go to the corporate segment, the lender said.
"...with the kind of pipeline that we have and the kind of action which is coming from the field level, from our large corporate branches, from our underwriting centres at retail, MSME and agriculture and also the 18 emerging corporate credit branches, we are very confident that this 14% credit growth target we have kept for ourselves, we will be able to achieve," management said in a post-earnings analyst call on Tuesday.
The bank expects gross recovery to be above INR 70 billion in 2024-25 (Apr-Mar), with recovery from written-off accounts also supporting net interest income. In the September quarter, gross recoveries of the bank were at INR 21.68 billion.
The lender has pegged deposit growth for FY25 at 13%. In line with the expected growth in deposits and credit in the coming quarters, Bank of India sees total business touching INR 18 trillion by 2027 and INR 32 trillion by 2031.
On the expenditure side, the bank said it would spend an additional INR 2 billion to INR 3 billion on information technology in Oct-Mar. It had earlier budgeted INR 21 billion for the entire financial year, of which it has already spent INR 7 billion in Apr-Sept, the bank said. End
Reported by Kabir Sharma and Christina Titus
Edited by Ashish Shirke
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