Bank of India, that plans to access capital markets to raise funds by end of this financial year, expects bad loans to ease in coming quarters even as stressed assets spiked in the second quarter.
N Damodaran, Executive Director, Bank of India, said the lender aims at reducing the level of gross non-performing assets (NPAs) to below Rs 58,000 crore by March 2020, from Rs 61,476 crore in July-September quarter.
He also said the bank’s net interest margins (NIMs) are expected to be above 3 percent by the year end.
Bank of India reported a net profit of Rs 266.4 crore for the July-September period, as compared to a loss of Rs 1,156 crore in the year-ago period.
NIMs rose to 2.99 percent, the highest in the last 18 quarters, as compared to 2.67 percent in the June quarter and 2.27 percent in the year-ago period.
The bank’s gross NPA ratio contracted 19 basis points sequentially to 16.31 percent due to higher write-offs, but net NPA increased 8 basis points from the previous quarter to 5.87 percent.
The bank’s stressed assets surged to Rs 16,309 crore in the September-ended quarter, from Rs 6,875 crore in the previous quarter and Rs 5,675 crore in the same period last year.
Damodaran said there was a one-off rise in stressed assets and it is likely to ease in coming quarters. The bank is expecting recoveries from seven stressed accounts worth Rs 4,200 crore that are currently under NCLT.
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