With 30% unused working capital limit and current sanctions of Rs. 18,000cr, we expect credit growth to return along-side lower cost of funds. However the current low levels of slippages and credit costs seem unsustainable as the asset quality is expected to remain largely unchanged (especially due to higher credit risk from MSME segment)....
The growth in Advances along with stable asset quality will remain the key in the upcoming quarters. However, market environment still remains challenging. Hence, we retain our rating HOLD rating on the stock with a revised price target of Rs. 54 based on 0.4x FY22E BVPS. Negative bottom line due to higher provisioning In Q4FY20, Banks Interest income stood at Rs. 10,528cr (-2.6% YoY), owing to contraction of 9bps and 70bps on yields of advances and investments, respectively. Net interest income slid down by 6.2% YoY to Rs. 3,793cr with NIM tightening 3bps YoY at...
Supply-demand dynamics remain challenging and credit conditions are expected to deteriorate amid current pandemic. However, recent interest rate cuts and government stimulus should provide some respite. We continue to see banks NPAs remain at high levels given high exposure to infra, NBFC and real estate sector. We lowered our FY20-22E estimates and value the stock at 0.32x FY22E BVPS, with a revised target price of Rs. 38 and continue to rate HOLD. Corona update and impact on industry...
We expect asset quality to improve further in the upcoming quarters and upgrade our rating for the stock to HOLD with revised price target of Rs. 70 based on 0.42x FY22E BVPS. Domestic loans and deposits witness growth The banks gross Loans and Advances grew 1.6% YoY to Rs. 378,686cr in Q3FY20, primarily driven by growth in Domestic loans (+6.7% YoY to Rs. 332,734cr). Domestic loans increased on the back of Govt. & Govt. guaranteed advances (+22.1% YoY), followed by Retail loans (+9.9% YoY). Within Retail loans, Home loan continued to...
The companys GNPA reached Rs. 62,068 cr., and GNPA ratio deteriorated slightly in Q1FY20 (+66bps QoQ to 16.5%). NNPA ratio also witnessed similar weakness (+18bps QoQ to 5.8%). Capital adequacy ratio increased to 14.4% in Q1FY20 versus 11.4% in Q1FY19 and 14.2% in Q4FY19. Provision coverage ratio remained flat on QoQ basis,...
Bank of India (BOI) posted a mixed operating performance during Q1FY2020, with lower-than-expected growth in NII and PAT. Net interest income (NII) growth was sluggish due to weak growth in advances. Provisions during the quarter declined significantly by 25.4% y-o-y as a result BOI registered profit growth of 155% y-o-y. BOI saw deterioration in overall asset quality, as gross non-performing asset (GNPA) ratio increased by 66 BPS and net NPA increased by 18 BPS q-o-q during the quarter. Increased fresh slippages (gross) were...
Elevated slippages & recognition of partial exposure of IL&FS; as substandard led to asset quality deterioration as GNPA ratio increased ~30 bps QoQ to 7.46%. Total IL&FS; exposure was at | 1715 crore out of which | 950 crore has been recognised as NPA while the remaining | 765 crore is standard. The bank has provided | 250 crore for the exposure. With elevated slippages provisions surged 152% YoY to ~| 974 crore Business traction remained muted as advances growth tapered down...
Bank of India Q2FY19 results Comment NII fell to Rs. 2926.79 Cr in Q2FY19 compared to Rs. 3354.3 Cr in Q1FY19. NII rose by 0.64% ( Rs. 18.55 Cr ) when compared with the same period last year.
28 May 2018 BOI reported a loss of INR39.7b, as provisions soared to INR66.7b (highest in eight quarters), led by elevated NPA provisions of INR67b (largely related to the RBIs revised stressed asset guidelines). NII declined 26% YoY (10% miss, weighed down by INR10b of interest reversals), and other income fell 22% YoY due to treasury losses. NIM shrank 23bp QoQ to 1.65%. Loan growth was weak (-2.7% QoQ); however, retail loans grew 5.5%/14.4% QoQ/YoY. Slippages increased sharply to INR129.7b, but recoveries and up-gradations increased to INR129.6b (v/s INR13.
Bank of India Q3FY18 results comment NII fell to Rs. 2501.23 Cr in Q3FY18 compared to Rs. 2908.24 Cr in Q2FY18. It displayed an erratic but decreasing trend from Q3FY17 to Q3FY18.
divergence of Rs140.6bn of which, Rs94bn is backed by SBLCs. BOI has recovered Rs47.5bn and is hopeful of recovering the remaining SBLC backed NPAs. Steep increase in NPAs, NCLT outcome key event for BOI: Most of the slippages due to divergence were recognized in Q3FY18 leading to a steep 30% qoq increase in GNPAs. Though BOI has a blended provision coverage ratio of 57% on GNPAs, the bank holds a PCR of c.70% on NCLT1 cases and up to 100% in some for a total NCLT1...
On a positive note, the slippages were at the lowest level in last 15 quarters as it declined by 47% QoQ in Q2FY18. As a result, Gross/Net non-performing asset (NPA) ratios improved by 43/23 bps sequentially to 12.6%/6.5%. However, one of the major concerns was the 80 bps QoQ increase in SMA-2 loans to 4.4% which raises doubt on the sustainability of lower slippages. Further, while upgradations and recovery declined by 61% QoQ, write-offs increased by 20% QoQ. Moreover, the overall stressed loans remained at ~20%, and the RBI...
Stronger-than-expected trading gains of INR7.4b (33% of PPoP) led to a 24% beat in other income. c) Loan growth remained muted at 0%/0% QoQ/YoY; however, retail loans grew 16.9% YoY. Slippages declined sharply to INR21.4b (2.4% slippage ratio annualized) from INR40.4b in 1Q, while recoveries and up-gradations were muted at INR10.7b (v/ INR27.4b in the previous quarter), despite 1Q being the seasonally strongest quarter for recoveries. However, high write-offs of INR27.9b led to sequentially lower absolute GNPLs/NNPLs. OSRL book was almost flat at...
NII increased to Rs. 2862.61 Cr in Q3FY17 compared to Rs. 2719.74 Cr in Q2FY17. NII grew by 5.71% ( Rs. 154.57 Cr ) when compared with the same period last year.
High slippage due to BoIs conservative approach on recognising NPAs, despite most loansbeingunderconsortiumlendingarrangements. Net slippage amount (gross slippage recovery/upgrades) has been falling and the...
Bank of India (BoI) reported another shocking performance as asset quality deteriorated sharply along with a loss of Rs 11.3 bn for Q2FY16 led by a sharp increase in provision expenses. Advances reported a decline on a YoY and QoQ basis, though NIMs increased by 17 bps QoQ to 2.29% leading to 3.7% QoQ growth (flat YoY) in NII. GNPA/ NNPA increased by 75/ 20 bps QoQ to 7.6%/ 4.3% respectively as asset quality deteriorated for the 7th quarter in a row.
BOIs Q1FY16 profit came in at Rs 1.3bn (83% yoy) significantly below our estimate of Rs 3.5bnledbyhigherNPAprovisions.Despiteweakcreditgrowthofjust2%yoy,NIIgrowth continuedtoremainweakat8.4%yoytoRs2.9bn(inlinewithourexpectation)duetoweak...
Bank of India (BoI) reported another shocker as the asset quality deteriorated sharply as well as reported weak earnings growth inspite of deferring Rs 7.4 bn of provision expenses. Earnings declined by 84% YoY to Rs 1.3 bn vs an estimated profit of Rs 3 bn, due to slower growth in NII, lower non interest income and higher provision expenses. Advances growth was lower at 2.1% YoY (-4.5% QoQ) whereas NIMs remained flat. GNPA/ NNPA increased by 141/ 75 bps QoQ to 6.8%/ 4.11% respectively.
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