Bank of India Q4 NII seen down 3.5% at Rs 2229cr

By Avni Raja, CNBC-TV18

Bank of India is to announce its Q4FY12 results. According to CNBC-TV18's estimates, the company's net interest income (NII) is seen down 3.5% Rs 2229 crore versus Rs 2307 crore. Its PAT is seen up 40% Rs 689 crore versus Rs 493 crore. FY12 (Derived Poll) Its NII is seen up 3% at Rs 8042 crore versus Rs 7810 crore. Its PAT is seen down 3% at Rs 2413 crore versus Rs 2488 crore. NII expected to remain flat due to slower credit growth of 17% YoY Deposit growth at expected to be lower at 10% 15-20 bps YoY decline in margins expected due to increase cost of funds Strong growth in profits due to 34% decline in operating expenses

• Employee expenses expected to decline YoY on account of higher base
• In Q4FY11, bank provided 990 cr for pension and gratuity expenses

 Asset quality – Key concern for BOI Over past 2 years, asset quality has remained volatile with an average slippage ratio of 2.9% Although slippages saw a sharp fall in Q3 (to Rs 870 Cr) Slippages expected to remain high in Q4 (Rs 1000 Cr expected) In Q3, slippages declined to 870 Cr (from 2800 Cr in Q2) Capital Raising Rs 1037 crore from LIC by way of Preferential allotment Tier 1 Cap at 7.7% as on Dec 2011 – likely to improve Stake held by LIC up to 13.52% from 8.93%