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State-owned reported a 142% jump in net profit at Rs 606 crore for the fourth quarter, riding on lower provision and higher net interest margin.

Its net profit was Rs 250 crore in the year-ago period.

The bank board has proposed a 20% dividend, ie. Rs 2 per equity share. The bank’s stock price jumped 1.5% to Rs 47.15 at BSE while the Sensex closed Tuesday 0.43% lower.

BoI’s net interest margin for the quarter was 2.58% compared with 2.01% in the earlier period. Net interest income rose 36% to Rs 3986 crore against Rs 2,936 crore. Other income was lower at Rs 1,587 crore against Rs 1,829 crore for the same period.

Operating profit rose 32% to Rs 2,466 crore for the fourth quarter against Rs Rs.1,870 crore in the corresponding period of FY21.

The bank witnessed an 11.4% year-on-year rise in advances to Rs 4.57 lakh crore with 57% of it being contributed by the retail loans.

“We expect 10-12% credit growth in FY23 and bring down gross NPA (non-performing assets) to below 8%,” managing director AK Das said.

BoI’s gross NPA ratio improved to 9.98% at the end of March, down 379 basis points from 13.77% a year back. The net NPA ratio was at 2.34% against 3.35%.

Its total provision in the reporting quarter was lower at Rs 1541 crore against Rs 1607 crore in the year-ago quarter. Out of this, the provision to cover bad loans was sharply lower at Rs 1135 crore against Rs 3089 crore. The provision coverage ratio stood at 87.76% against 86.24% earlier.

The bank is comfortably placed with a capital adequacy ratio being 17%. The bank board however approved a share sale plan to raise Rs 2500 crore through either qualified institutional placement or a follow-on public offer as the lender looks to bring down government shareholding to below 75% from 81%.

Das said the bank would take a call on capital raising after June.


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