Bank of India Q1 net profit lower at Rs735cr on 400 bps increase in the cost to income ratio at 49.18%

Bank of India Ltd reported -2.13% fall in total consolidated revenues in the Jun-21 quarter at Rs11,766cr

Aug 04, 2021 10:08 IST India Infoline News Service

Bank of India Ltd reported -2.13% fall in total consolidated revenues in the Jun-21 quarter at Rs11,766cr, but revenues were 2.52% higher on sequential basis compared to Mar-21 quarter as the COVID 2.0 impact was largely limited. While the interest income and investment income were lower yoy due to lower yields, revenues from other income were higher on yoy basis.

On  yoy basis, the treasury income was higher while the retail banking income was almost flat. However, the revenues from corporate banking were sharply lower on yoy basis. The net interest income grew by 39% yoy while the net interest margins or NIM improved by 15 bps to 2.16% in the Jun-21 quarter.

Profit after tax (PAT) for the Jun-21 quarter was lower by -13.05% at Rs735cr due to  lower interest income and higher cost to income ratio at 49.18% in the Jun-21 quarter. Yield on advances fell from 7.5% to 6.67%.  PAT margins at 6.25%  in the Jun-21 quarter were lower than 7.03% in the Jun-20 quarter but better than 0.72% in Mar-21 quarter.

Gross NPAs at 13.51%, was lower by 26 bps yoy, but absolute NPAs are still quite high and far from sustainable over the medium to long term. The ROA at 0.37% is the lower side even in PSU banking. Capital adequacy is comfortable at above 15% but any expansion of the loan book from these levels will require additional capital buffers.

Financial highlights for Jun-21 compared yoy and sequentially

Bank of India
Rs in Crore Jun-21 Jun-20 YOY Mar-21 QOQ
Total Income ₹ 11,766 ₹ 12,022 -2.13% ₹ 11,477 2.52%
Operating Profit ₹ 2,789 ₹ 2,857 -2.37% ₹ 2,130 30.95%
Net Profit ₹ 735 ₹ 846 -13.05% ₹ 83 784.39%
Diluted EPS ₹ 2.18 ₹ 2.58 ₹ 0.25
Operating Margins 23.71% 23.76% 18.56%
Net Margins 6.25% 7.03% 0.72%
Gross NPA Ratio 13.51% 13.91% 13.77%
Net NPA Ratio 3.35% 3.58% 3.35%
Return on Assets 0.37% 0.46% 0.13%
Capital Adequacy 15.71% 13.40% 15.55%

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