Mumbai: State-run Bank of India on Tuesday reported a massive 84 percent plunge in its April-June quarter net profit at Rs 130 crore, dragged by an increase in provisioning and higher non-performing assets.
"Higher provisioning and rise in NPAs were the main contributors to the fall in profit in the reporting quarter," acting managing director and chief executive BP Sharma told reporters here today.
In the quarter ended March 2015, the bank had reported a net loss of Rs 56 crore, while in the year ago period its net profit stood at Rs 806 crore.
Total income of the bank rose to Rs 11,659 crore during June quarter, from Rs 11,328 crore in the same quarter of 2014-15 fiscal.
Total provisions in the period rose 25.42 percent to Rs 1,574 crore as against Rs 1,255 crore in the same period last year.
Provisions for bad and doubtful assets rose 147.26 percent to Rs 2,119 crore from Rs 857 crore last year.
Gross non-performing assets doubled to 6.80 percent from 3.28 percent last year, while net NPA stood at 4.11 percent as against 2.14 percent last year.
Recovery in the quarter was of Rs 468 crore while upgrades and write-offs stood at Rs 1,193 crore and Rs 178 crore, respectively.
The bank sold bad loans worth Rs 64 crore to asset reconstruction companies in the quarter and Sharma said the bank will not be engaging ARCs going forward as the bank is looking for 100 percent upfront payment.
"Though the pace of accreation in NPAs has not reduced, the momentum of recovery and upgradation has improved and will be maintained," Sharma said.
He said the bank expects the gross NPA level below 5.39 percent in the current fiscal.
Gross fresh slippages stood at Rs 6,535 crore.
Net interest margin globally stood at 2.12 percent and domestically it was at 2.52 percent in the quarter. The city-based bank is targeting to improve domestic NIM to 2.60 percent in this fiscal.
Its global business increased by 2.43 percent to Rs 9,03,874 crore in the quarter from Rs 8,82,441 crore in the same period last year, while domestic business rose 2.18 percent to Rs 6,57,346 crore from Rs 6,43,328 crore.
Casa deposits were up 9.61 percent to Rs 1,15,737 crore from Rs 1,05,589 crore.
The bank is looking at a loan growth of 10-12 percent this year.
Shares of the bank ended 5.68 percent down at Rs 154.50 on the BSE.