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Bank of India has posted net loss of Rs 3571.41 crore in the quarter ended March 2020 (Q4FY2020), driven by surge provisions and decline in the net interest margin. The net interest margin of the bank has eased to 2.90%. However, the bank has improved business growth to 8% driven by acceleration in the growth of both deposits to 7% and advances to 9%. The bank has improved credit deposits ratio to 75.0% end March 2020. Fresh slippages of advances dipped, helping to improve asset quality in Q4FY2020.
Asset quality improves: The fresh slippages of advances dipped helping to reduce GNPA and NNPA in Q4FY2020.
Fresh slippages declined to Rs 2764 crore in the quarter ended March 2020, while the recoveries, upgradations, write-offs and sales of bad loans together were at Rs 2944 crore in Q4FY2020.
Outstanding standard restructured advances of the bank stood at Rs 6775 crore (1.6% of global advances) at end March 2020.
Risk weighted asset of the bank declined 4% to Rs 294189 crore at end March 2020.
| Asset Quality Indicators: Bank of India |
|
Mar-20 |
Dec-19 |
Sep-19 |
Jun-19 |
Mar-19 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
61549.93 |
61730.54 |
61475.60 |
62068.40 |
60661.12 |
0 |
1 |
| Net NPA (Rs Crore) |
14320.10 |
20113.34 |
19645.83 |
19288.34 |
19118.95 |
-29 |
-25 |
| % Gross NPA |
14.78 |
16.30 |
16.31 |
16.50 |
15.84 |
-152 |
-106 |
| % Net NPA |
3.88 |
5.97 |
5.87 |
5.79 |
5.61 |
-209 |
-173 |
| % Provision Coverage Ratio |
83.75 |
77.15 |
77.12 |
77.18 |
76.95 |
660 |
680 |
| % CRAR - Basel III |
13.10 |
14.20 |
14.09 |
14.35 |
14.19 |
-110 |
-109 |
| Tier I - Basel III % |
9.90 |
11.17 |
11.06 |
11.20 |
11.07 |
-127 |
-117 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Performance:
Business growth accelerates: Business of the bank increased 8% at Rs 972026 crore at end March 2020. The domestic business moved up 12% at Rs 840209 crore, while foreign business declined 14% to Rs 131817 crore at end March 2020. Deposits rose 7% at Rs 555505 crore, while the advances increased 9% to Rs 416521 crore at end March 2020.
CASA ratio eases: CASA deposits of bank increased 9% to Rs 197750 crore. Current account deposits rose 12% at Rs 26046 crore, while saving account deposits improved 8% to Rs 171704 crore. The CASA ratio eased to 41.2% at end March 2020 from 42.7% a quarter ago and 43.4% a year ago.
Domestic loan growth improves: The domestic advances book expanded at improved pace of 9% to Rs 357670 crore at end March 2020. Within the domestic advances, the retail credit grew 8% to Rs 60834 crore, while credit to industry rose 1% to Rs 123953 crore. Agri credit increased 4% to Rs 52184 crore, while services credit jumped 23% at Rs 120699 crore at end March 2020.
Investment book of the bank moved up 7% to Rs 156267 crore at end March 2020, as SLR investment rose 10% to Rs 117745 crore at end March 2020. Within the SLR book, the AFS investment increased 27% to Rs 30220 crore at end March 2020. The duration of the AFS-SLR book stood at 1.51 years at end March 2020.
NIM eases: Global NIM of the bank declined to 2.90% in Q4FY2020 from 3.07% in the previous quarter and 2.93% in corresponding quarter last year. Yield on advances dipped 37 bps qoq to 8.54%, while cost of deposits eased 5 bps qoq to 4.53% in Q4FY2020 helping to improve NIMs.
Network Expansion: Bank has the network of 5083 branches and 5750 ATMs at end March 2020 compared to 5092 branches and 6154 ATMs at end March 2019.
Book Value per share stood at Rs 114.4 per share at end March 2020, while adjusted book value (net of NNPA and 25% of restructured advances) stood at Rs 65.6 per share at end March 2020.
Quarterly Performance:
NII declines due to fall in margins: For the quarter ended March 2020, the NII of the bank declined 6% to Rs 3793.05 crore. Interest earned declined 3% to Rs 10528.02 crore, while interest expenses fell 1% to Rs 6734.97 crore.
Core fee income dips: The core fee income of the bank dipped 11% to Rs 775 crore. However, the forex income moved up 70% to Rs 418 crore and trading income jumped 64% to Rs 243 crore in Q4FY2020. The other non-interest income also increased 16% to Rs 252 crore, supporting 14% growth in the non-interest income of the bank to Rs 1688 crore in Q4FY2020.
Net Total income declined 1% yoy basis to Rs 5480.81 crore in quarter under review.
Expense ratio dips: Operating expenses declined 12% to Rs 2828.25 crore with 3% fall in other operating expenses to Rs 1155.3 crore, while employee expenses also dipped 18% to Rs 1672.95 crore.
The expense ratio plunged 6.7 percentages yoy to 51.6% in Q4FY2020 from 58.3% in Q4FY2019.
Operating profit moved up 15% to Rs 2652.56 crore in the quarter ended March 2020.
Provision zooms: The provision for NPA jumped 387% to Rs 7316 crore in Q4FY2020, while the standard advances provisions moved up 164% to Rs 632 crore in Q4FY2020. However, provisions for investment depreciation declined 51% to Rs 87 crore in Q4FY2020. Overall provisions zoomed to Rs 8141.92 crore in Q4FY2020 from Rs 1897.43 crore in Q4FY2019.
The surge in provisions, led to pre-tax losses of Rs 5489.36 crore in the quarter ended March 2020.
Tax provision reversals: The bank has written back tax provisions of Rs 1917.95 crore in Q4FY2020, reducing the net losses to Rs 3571.41 crore for Q4FY2020.
Financial Performance FY2020:
For the year ended March 2020 (FY2020), Bank has posted the net loss of Rs 2956.89 crore compared with net loss of Rs 5546.90 crore in FY2019. The net interest income moved up 12% to Rs 15256.97 crore, while non-interest income surged 44% to Rs 6713.07 crore in FY2020. The expense ratio improved to 47.6% in FY2020 compared to 55.8% in FY2019. The operating expenses rose 2% to Rs 10451.40 crore, while provision and contingencies dipped 4% to Rs 16121.37 crore. The pre-tax loss came in at Rs 4602.73 crore in FY2020. Bank has reversed tax provisions of Rs 1645.84 crore, net loss came in at Rs 2956.89 crore in FY2020.
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