Net profit of Rs 2,088 crore for the quarter ended September 2021 was Rs 1,679 crore a year ago. Other income increased to Rs 3,579 crore from Rs 2910 crore last year on account of debt recovery and an increase of Rs 1,200 crore in treasuries.
The growth in other income made up for slower growth in net interest income (NII), which is the main income the bank earns from lending. NII rose 2% to Rs 7566 crore as the cost of deposits fell to 3.52% in September 2021 from 3.99% a year ago and covered for a 6% decline in total accrued interest.
A 2% year-on-year decline in provisions also helped the bank’s bottomline. Provisions fell to Rs 2754 crore from Rs 2811 crore a year ago and were lower than Rs 4005 crore reported in June 2021 and bad loan recovery improved and NPAs fell. gross NPA The ratio rose to 8.11% in September 2021, from 9.14% a year earlier. CEO Sanjiv Chadha Said that the bank has even more downsides behind and asset quality trends will only improve.
“We were guided for credit costs of 1.5% to 2% with potential trends on the lower side of the range as we stick to our guidance this year… Margins have been stable,” Chadha said.
Recovery including Rs 1246 crore from written-off accounts increased to Rs 3246 crore and is higher than the total recovery of Rs 1981 crore recorded in the corresponding quarter of the previous year. Like other major banks, BoB was helped in recovery of Rs 877 crore from DHFL.
Total loan book grew 2% to Rs 7.34 lakh crore from Rs 7.19 lakh crore a year ago, mainly due to 33% growth in personal loans and 23% growth in auto loans by 10% in retail loans . The corporate debt book remained flat after declining 10% in the first quarter ended June.
Chadha said though corporate growth has been sluggish for over a year, he expects some demand in the second half of the fiscal as capacity expansion takes place in sectors such as cement, steel, green energy and electric vehicles. Retail mortgages account for 64% of the bank’s total retail loans of Rs 1.35 lakh within mortgages, with high growth businesses such as personal loans making up less than 5% of the book.
Chadha expects the bank’s credit growth to be close to double digits this year on the back of growth in retail loans and high-risk auto and personal loan businesses using bank credit appraisals and handing over its own customers to outsiders. will continue to increase.