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Informist, Friday, Jan. 24, 2025

By Priyasmita Dutta and Kabir Sharma

NEW DELHI –Bank of India is "on track" to spend the INR 20-21 billion earmarked for information technology and infrastructure for 2024-25 (Apr-Mar), the public sector bank's senior management said in a post-earnings analyst call Friday. "The spending will be in all three segments – information technology, digital innovation and cybersecurity," the bank's Managing Director and Chief Executive Officer Rajneesh Karnatak said. 

The bank had budgeted INR 20 billion for information technology-related spending in FY24, of which it had spent INR 18 billion, or 90%. 

The bank's initiative to improve its digital avatar is part of its plan to onboard new customers. The bank on Friday reported a 34.6% year-on-year growth in its net profit to INR 25.17 billion for Oct-Dec, aided by a sharp fall in provisions and a jump in other income. The bank declared its earnings after market hours. On Friday, shares of the bank closed 1.3% lower at INR 98.37 on the National Stock Exchange.

The bank has internally set a net profit target of INR 80 billion for the full year and considering the Apr-Dec net profit is at INR 65.93 billion, Karnatak said the bank is fairly confident of reaching the target. There are loans to the tune of INR 70 billion which are already in the pipeline, he said, adding that robust business will drive the bottom line. 

As on Dec. 31, the bank's global advances rose 15.3% on year to INR 6.52 trillion and global deposits increased 12.3% to INR 7.95 trillion.

Karnatak said the PSU bank was focused on garnering bulk deposits to improve its credit deposit ratio. Bulk deposits accounted for 13.25% of the total deposits at the end of December, lower than 14.06% in the previous quarter. The bank's credit deposit ratio was 81.97% as on Dec. 31, higher than 80.23% a quarter ago and 79.83% a year ago. 

Karnatak said he expects credit costs to moderate to 0.7% in FY25 from 0.72% in the first nine months of the year. Cost to income ratio will also moderate to 51% in FY25, from 51.79% during Apr-Dec, he said. 

On the liquidity coverage ratio, Karnatak said the bank was at a "comfortable" level of nearly 117%, higher than the Reserve Bank of India's minimum requirement of 100%. 

Karnatak expects the Reserve Bank of India's Monetary Policy Committee to cut the repo rate in February.  

Bank of India's bottom line in Oct-Dec was aided by a sharp drop in provisions and contingencies, which declined 39.4% on year to INR 3.04 billion. Fresh slippages during the quarter fell to INR 10.45 billion from INR 23.57 billion in Jul-Sept and INR 11.72 billion in the last quarter of 2023. Karnatak said the bank is expecting to recover INR 3-5 billion from written off accounts in Jan-Mar.  End

Edited by Saji George Titus

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