By Sachin Murdeshwar
Mumbai : Bank of India announced its audited results for the Q4 and FY 2017-18, following approval by its Board of Directors on May 28, 2018.
BUSINESS:
- Global Business of the Bank stood at Rs.8,96,850 crore as on March 31, 2018 against Rs.933,820 crore as on March 31, 2017. The de-growth in business level has been as a result of conscious decision of the Bank to rationalise its overseas exposure.
- The ratio of CASA has improved from 39.84% in March, 2017 to 41.43% in March, 2018. The CASA level has improved from Rs.1,66,608 crore in March, 2017 to Rs. 172,787 crore in March, 2018 as a result of various initiatives taken by the Bank.
- The Gross Advances stood at Rs. 3,75,995 crore as on March 31, 2018 against Rs.3,93,788 crore as on March 31,2017. The decline in advances was because of rebalancing of exposure in overseas operation.
- The domestic advances increased from Rs.2,85,725 crore as on March 31, 2017 to Rs.2,93,500 crore as on March 31, 2018. The Bank resorted to IBPC placement of Rs. 4830.84 crore out of its total domestic advances. Including the same, the Bank’s domestic advances increased by Rs.12,606 crore or 4.41%.
- The RAM Advances (Retail, Agriculture and MSME) increased from Rs.1,37,156 crore as on March 31,2017 to Rs.1,50,924 crore as on March 31, 2018 and its share in Advances increased from 48.00% in March 2017 to 51.42% in March 2018.
- Retail Advances posted a 19.25% growth to reach Rs.47,817 crore.
- Priority Sector advances stood at Rs.1,21,691 crore which constitutes 40.80% of ANBC. Agriculture advances were Rs.51,938 crore forming 18.58% of ANBC. Both the sectoral advances were above the regulatory requirement.
ASSET QUALITY:
- The Gross NPA ratio improved from 16.93% in December, 2017 to 16.58% in March 2018. Similarly, the net NPA ratio declined from 10.29% in December, 2017 to 8.26% in March, 2018, thanks to sizeable sequential improvement in PCR.
- The Bank successfully recovered Rs. 9,239 crore out of Rs.9,766 crore assets marked as NPAs on account of divergence mandated by RBI. However, as a result of RBI directive dated 12.02.2018, the Bank had to categorize Rs. 5,107 crore restructured advances as NPAs. Notwithstanding that, the Gross NPAs declined from Rs.64,249 crore in December, 2017 to Rs.62,328 crore in March, 2018 and Gross NPA ratio improved from 16.93% in December, 2017 to 16.58% in March 2018.
- Similarly, the Net NPAs reduced from Rs.36,117 crore in December,2017 to Rs.28,207 crore in March,2018 and net NPA ratio improved from 10.29% in December, 2017 to 8.26%.
- Provision Coverage Ratio improved from 56.96% in December 2017 to 65.85% in March 2018.
- Total Global Restructured Standard Assets of the Bank came down both on y-o-y basis as well as sequentially. From Rs.11,448 crore in March, 2017 and Rs. 10,633 crore in December, 2017, it has come down to Rs.7,630 crore in March, 2018.
PROFIT – Q4 FY 2017-18:
- The Bank’s Operating Profit stood at Rs.1,172 crore for Q4 2017-18 as against Rs.3,127 crore for Q4- FY 2016-17. The Bank’s operating profits have been impacted by decline in interest income because of rise in NPAs as well as fall in treasury income with respect to last year.
- The Bank’s Net Profit stood at (-) Rs. 3,969 crore in Q4 FY 2017-18 as against (-) Rs. 1,046 crore during Q4- 2016-17. The decline in Net profit was due to provisioning for bad debts as well as for treasury (MTM) losses.
- The Non-interest Income of the Bank increased sequentially from Rs.1,041 crore in December, 2017 to Rs.1,375 crore in March, 2018, supported by profit from exchange transactions and recovery in written-off accounts. On y-o-y basis, however, there has been decline in non-interest income which stood at Rs.1,754 crore during Q4 of FY 2016-17, due to fall in the treasury income because of rising yield during the current year.
- The NIM (Global) of the Bank has come down from 2.39% in Q4 FY 2016-17 to 1.65% in Q4 FY 2017-18 on account of lower yield which was due to increase in NPAs.
- The Cost of Deposits (global) came down from 4.77% in Q4 FY 2017 to 4.58% in Q4-FY 2018 and the Cost of funds came down from 4.53% to 4.43% during the same period. Particularly, the domestic cost of deposits has been brought down from 5.81% to 5.31% through various measures, including organizing special campaign for CASA mobilisation and shedding of high cost deposits.
PROFIT – FY 2017-18:
- The Bank’s Operating Profit stood at Rs.7,139 crore for FY 2017-18 as against Rs.9,733 crore for FY 2016-17. The decline in Net Interest Income because of dual impact of reduction in MCLR and increase in NPA level along with fall in non-interest income (because of lower treasury income) have adversely impacted the operating profits level.
- The Bank’s Net Profit stood at (-) Rs. 6,044 crore in FY 2017-18 as against (-) Rs.1,558 crore in FY 2016-17.
- The Non-Interest Income of the Bank stood at Rs.5,734 crore for FY 2017-18 against Rs.6,772 crore in FY 2016-17. On y-o-y basis, there was decline in non-interest income by Rs.1,039 crore (-15%). As indicated earlier, the non-interest income has been impacted by fall in treasury income because of rise in G-sec yield. Barring this, there has been increase in all other components of non-interest income. The income from forex exchange transaction has increased by 19.0% and income from recovery written off a/c has increased by 60.0%.
- The Cost of Deposits (global) came down from 4.84% in FY 2017 to 4.58% in FY 2018. The domestic cost of deposits has been brought down from 6.04% in March, 2017 to 5.52% in March,2018 and cost of funds has been curtailed from 5.48% to 5.09% during the same period.
CAPITAL ADEQUACY:
- The CRAR (Basel III) improved to 12.94% in March 31, 2018 against 12.05% in December, 2017 and 12.14% in March, 2017.
- The Tier-I Capital stood at 9.73% and CET-1 ratio at 7.87%, which are also higher than the corresponding capital ratios for December,2017 and March, 2017.
INITIATIVES
v During the current year the Bank has implemented various initiatives for a Prompt Turn Around. A few of them are mentioned as under:
v Concept of Area Managers andStar Prime implemented for being more customer focused and for business development, recovery, digitization at ground level and re-activation of branches.
v Monthly Campaign called “Ghar Ghar Dastak” being organized every month for speeding up CASA, NPA Recovery and Credit disbursement.
v Special CASA campaigns “Amantran” organized with special focus on Government, Business Associates, HNIs & NRIs
v Strategy for re-balancing of portfolio in favour of RAM advances (Retail, Agriculture and MSME) and reducing exposure to Corporate sector.
v A non-discriminatory OTS Scheme called “Mission Samaadhan” formulated for quick resolution of NPAs
v Refurbishing select branches as “Star Digi” branches with high end digitalized services for tech savvy customers.
v IT initiative “Star Mahashakti”being implemented for taking the Bank’s technological capability to next level
v Focus on Digitisation and Alternate Delivery Channels such as internet Banking, Debit and Credit Cards, POS machines
v One of the premier Banks in implementing concept of Digital Village. Till now 2505 villages converted into digital villages.
v Activation of 731 Growth Centers through Business Correspondents (BCs) called –“Star Points” for expanding our outreach.
AWARDS:
v Bank of India ranked as the 2ndMost Trusted Bank in the PSU Bank category by Economic Times.
v Bank of India has been conferred“Market Achievers’ Award” in Currency Derivatives Segment amongst Public Sector Banks by NSE.
v Bank of India awarded as “Best Performer in Currency Derivative Segment” amongst all Banks’ Category by BSE.
v IDRBT Banking Technology Excellence Award, Best Bank for Managing IT Ecosystem, large Bank category.
v IDRBT Banking Technology Excellence Award, Best Bank for Electronic Payments, large bank category.
v Bank of India awarded for Best Corporate Social Practices: Promoting Employment for Physically Challenged and also for Support and improvement in Quality of Education from ET NOW- WORLD CSR DAY Award.
v Bank of India awarded as “The Most Efficient Bank in Kenya” by Think Business Banking Award 2018.
v Bank of India-Uganda Subsidiary awarded for “Best Company Keeping Image High Award 2018” from Indian Business Forum, Uganda.
v Bank’s In-House Journal ‘Taarangan’ conferred with Prestigious “ABCI Magazine of the Year Award 2017” at Mumbai.