Mumbai: Public sector lender Bank of India returned in the black after two quarters by posting a profit of Rs 252 crore for the quarter ended March 31 against a loss of Rs 3969 crore during the same period last year. A significant decline in bad loan provisions and an exit from the Reserve Bank of India’s prompt corrective action framework aided the bank’s earnings.
“The bank’s asset quality, capital and loan growth are in much better position now, we can start giving returns to stakeholders,” said Dinabandhu Mohapatra, MD, Bank of India. “Many large accounts are at the end of resolution cycle, we are expecting a good writeback to our profits in Q1FY20, if macroeconomic conditions improve the bank will target loan growth of 15%.”
While provisions came down sharply to Rs 1897 crore in the March quarter against Rs 9000 crore in the preceding quarter, the bank’s net non-performing assets declined marginally to 5.61% against 5.67% during the December 2018 quarter.
The state-run lender’s gross bad loan ratio at 15.84% still remains much above the comfort zone. Formation of fresh bad loans was much lower at Rs 3102 crore as against Rs 4315 crore sequentially. The recoveries from bad loans came in at Rs 1982 crore at the end of the March quarter.
The bank’s rose 1.94% to Rs 81.65 at end of days’ trade.