Bank of India Q4 net up 15.36 per cent at Rs 494 cr

Public sector lender Bank of India (BoI) on Monday reported 15.36 per cent growth in net profit to Rs 494 crore for the January-March quarter propelled by an impressive 48.70 per cent jump in interest income.

The bank's Chief Financial Officer Ravi Kumar said the growth in net profit would have been much higher but for an additional provisioning for pension liabilities.

Under 'payments to and provisioning for employees' head, BoI's expenditure shot up 136.33 per cent over the corresponding period last year to Rs 1,415 crore, he said, adding bulk of the total Rs 3,850 crore to be provided has already been done and the bank will have smoother time ahead.

The results have disappointed market as Bank of India shares closed 7.73 per cent down at Rs 421.65 on the Bombay Stock Exchange.

For the year ended period March 31, 2011, BoI's net profit was up 43 per cent to Rs 2,489 crore. Its overall credit growth stood at 22.16 per cent for the year while the deposits were up by 28.68 per cent.

Bank's Chairman and Managing Director Alok Misra told reporters that he is targeting a credit growth of 21 per cent and deposit growth of 20 per cent for FY 12.

The bank's net interest margin increased to 2.94 per cent in Q4 against 2.57 per cent same period last year indicating that it has been passing the brunt of rate hikes to its borrowers. Misra said he expects the margins to be under pressure going ahead but the bank will work towards maintaining NIM at the current levels.

The CASA (current and savings account) deposits of the bank stood at 29.18 per cent as of March 31 and Misra said the bank is targeting to increase the CASA share to 35 per cent by end FY 12 and has set a target of adding 10 million new accounts during the fiscal.

The bank with 65.86 per cent shareholding of government of India witnessed a fall in its overall capital adequacy ratio to 12.17 per cent with the core tier-I capital at 8.33 per cent.

Misra said with the increase in credit that it is looking at, it will need capital infusion this year but the bank has not crystallised its plans yet.

The bank clocked good growth in assets across segments except retail which witnessed a muted growth at 5.70 per cent to Rs 16,648-crore, pulled down by a fall in residential and business mortgage credit. Misra attributed this to the bank's focus on re-organising its business operations during the fiscal.

Among other parameters, the bank's net non performing assets ratio went down to 0.91 per cent during the year.

Profits from overseas operations stood at Rs 492-crore for the year, Misra said, adding that during FY 12, it is contemplating to start representative offices in New Zealand, Uganda, Canada and Botswana.