Bank of India Q2 profit seen down 2% to Rs 603 cr

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Bank of India Q2 profit seen down 2% to Rs 603 cr

Bank of India is likely to report a profit after tax of Rs 603 crore in the second quarter of FY12, a fall of 2% as compared to Rs 617 crore in the corresponding quarter of last fiscal.

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Bank of India is likely to report a profit after tax of Rs 603 crore in the second quarter of FY12, a fall of 2% as compared to Rs 617 crore in the corresponding quarter of last fiscal.

Net interest income of the bank is expected to increase 8% to Rs 1,925 crore in the July-September quarter of FY12 versus Rs 1,776 crore in a year ago period.

Expectations

·          Has been facing severe asset quality issues

·          Reported Rs 1684 crore slippages in Q1
o         Of which majority was seen in the agriculture portfolio - Rs 605 crore

·          NPAs are likely to increase to due migration to system based NPA recognition

·          Fresh slippages expected to continue

·          NIMs should remain stable & could see some improvement

·          In Q1 NIMs declined sharply by 75 bps QoQ to 2.2% due to
o         Increase in cost of deposits
o         Higher slippages

·          Loan growth expected to remain healthy at 22%

·          Deposit growth at 25%