Business Daily from THE HINDU group of publications
Tuesday, Jul 28, 2009
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Business Daily from THE HINDU group of publications Tuesday, Jul 28, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Money & Banking
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Financial Performance Corporate Results - Public Sector Banks Web Extras - Non-Performing Assets Higher tax liabilities weigh on Bank of India profits 
Mr M. Narendra (left) and Mr B.A. Prabhakar, Executive Directors of Bank of India, at a press conference in Mumbai on Monday. Our Bureau Mumbai, July 27 Bank of India’s net profit was flat at Rs 584 crore in the first quarter of 2009-10, against Rs 562 crore in the corresponding quarter last year. Higher tax liabilities were the reason for the lower profits, said Mr B.A. Prabhakar, Executive Director. This fiscal the bank had to make a provision of Rs 286 crore for tax, against Rs 161 crore last year, an increase of 78 per cent. “Last year we had claimed tax exemption on depreciation on our investment. But this year it was not there as we had appreciation,” he said. While the profit from sale of securities increased to Rs 240 crore (Rs 68 crore), the profit from exchange transactions came down to Rs 36 crore (Rs 113 crore). “We had to book a loss of Rs 76 crore on revaluation of foreign assets,” Mr Prabhakar said. 
Net interest margin declined to 2.42 per cent (2.89 per cent) as cost of deposits increased. Cost of deposits was up at 5.81 per cent (5.51 per cent). Yield on advances was up marginally at 9.27 per cent (9.15 per cent). “We expect NIM to improve by 25-30 basis points in Q2 and reach 3 per cent by Q3,” Mr Prabhakar said. The share of net NPAs was up at 0.84 per cent (0.52 per cent).
Explaining the reason for the rise in net NPAs, Mr Prabhakar said, “Earlier floating provision of Rs 326 crore was allowed to be netted of from gross NPA. But starting from this fiscal, as per RBI guidelines, this is not allowed. That is why provisions, too, are down.” The share of current and savings account (CASA) deposits to total deposits fell to 32 per cent (36 per cent). The bank is planning to add 125 branches and 500 ATMs this fiscal subject to RBI approval. Bank of India’s stock ended at Rs 332.8, down 4.3 per cent from the previous close of Rs 347.45, on the BSE on Monday. Bank of India net profit up 7% at Rs 810 crore Bank of India cuts deposit rates Bank of India to bring more districts under branchless banking More Stories on : Financial Performance | Public Sector Banks | Non-Performing Assets
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