Mumbai: State-owned Bank of India (BoI) has sought a Rs 2,000 crore capital infusion from the government even as its Q2 net profit fell by 57.67 percent due to high provisions.
BoI`s total net profit in the quarter ended September 30 dropped to Rs 323.34 crore as against Rs 763 crore in the year-ago period after it provided Rs 883 crore during the three-month period as against Rs 452 crore provisioning made in the year-ago period.
Out of the total provisioning, Rs 470 crore was
provided to cover its bad-loans.
Gross NPAs escalated to 2.61 percent in Q2 from 1.53 percent a year-ago, while the net NPAs rose to 1.08 percent from 0.48 percent last year, the lender said.
BoI expects to receive the Rs 2,000-crore capital from the government by March-April 2010, which will help it to support the business growth, bank Chairman and Managing Director Alok Misra told reporters here.
The lender witnessed around 60 percent of the total slippages in the second quarter from the restructured assets, Misra said.
Total income grew by 12 percent to Rs 5,164.96 crore from Rs 4,612.27 crore in the year-ago quarter, while net interest income rose by 3.37 per cent to Rs 1,409 crore from Rs 1,363 crore a year-ago, he said.
The net interest margin of the bank, as at end-
September, stood at 2.57 percent.
For the half-year ended September 30, 2009, the public
sector lender posted a net profit of Rs 907.66 crore, down
31.4 percent from Rs 1,324.81 crore in the same period last
Revenue for the period stood at Rs 10,188 crore as
against Rs 8,727 crore in H1 of the last fiscal.
There was a steep rise in gross non-performing assets
to Rs 3,920 crore for the six months ended September 30, while
net NPAs rose from Rs 608 crore in the year-ago period to Rs
1,605 crore as at September 30.
The bank has identified agriculture, real estate and
the corporate sectors as growth drivers in the months ahead,
"We see our growth coming from agriculture, real
estate and corporate sectors. We expect to make a good net
profit in the third quarter," Misra said.
Given the current market conditions, the lender has
lowered its loan growth target from 20 per cent to 18 per
cent, Misra said.
The retail credit (domestic) portfolio of BoI declined
by 23 per cent in the second quarter.
However, the bank`s SME loan portfolio grew by 30.57
per cent, agriculture by 17 percent and corporate portfolio
by 27.40 percent.
BoI`s deposit-base grew by 20.99 per cent to Rs
1,98,715 crore in the second quarter, while advances rose by
16.18 per cent to Rs 1,50,238 crore.
The lender will reach the provision coverage target of
70 percent from the present 59 per cent, Misra said.
At present, the Mumbai-headquartered BoI has a network
of 3,097 branches operating in 1,920 cities. Its has a capital
adequacy ratio of 13.52 per cent.