More than double provisions in Q3 YoY, and lower net interest income, other income and operating income hit profitability.
Public sector lender Bank of India has reported net loss of Rs 2,341.20 crore for quarter ended December 2017, with disappointing asset quality performance and big FY17 divergence.
More than double provisions in Q3 YoY, and lower net interest income, other income and operating income hit profitability. Profit in year-ago quarter stood at Rs 107.72 crore and CNBC-TV18 poll estimated loss at Rs 51.5 crore for the quarter.
Net interest income during the quarter declined 18.4 percent year-on-year to Rs 2,501 crore was far lower than CNBC-TV18 poll estimates of Rs 2,826.6 crore.
Asset quality performance was very bad as gross non-performing assets (NPA) were sharply higher at 16.93 percent in Q3 against 12.62 percent in previous quarter while net NPAs were also higher at 10.29 percent compared to 6.47 percent QoQ.
In absolute terms, gross NPAs shot up 30 percent sequentially to Rs 64,248.6 crore and net NPAs jumped 53 percent to Rs 36,117.2 crore for quarter ended December 2017.
The bank has reported divergence in gross NPAs at Rs 14,000 crore and net NPAs at Rs 9,707 crore for the year ended March 2017 while the divergence in provisioning was Rs 4,350 crore.
After taking into account this divergence in provisioning, the adjusted loss for FY17 stood at Rs 6,248 crore against earlier reported loss of Rs 1,558 crore, Bank of India said in its filing.
The bank further said out of gross NPA of Rs 14,057 crore (divergence), Rs 9,405 crore is on account of standby letter of credits (SBLCs) issued by other banks for which Bank of India is not required to make any additional provision during the quarter and for the balance amount, based on outstanding as of December 2017, an additional provision of Rs 900.23 crore has been made.
Out of Rs 9,405 crore, the bank has so far realised an amount of Rs 4,751 crore by invoking the SBLCs of other banks.
Provisions and contingencies for the quarter stood at Rs 4,899.7 crore, increased by 150.84 percent sequentially and 123.8 percent year-on-year.Other income (non-interest income) slipped sharply by 70 percent year-on-year to Rs 1,041.2 crore and operating profit fell 81.5 percent to Rs 1,354.3 crore for quarter ended December 2017.