Provisions and contingencies fell 13 percent sequentially and 15 percent year-on-year to Rs 1,953 crore for the quarter ended September 2017.
Public sector lender Bank of India's second quarter earnings beat analyst expectations, and even the asset quality improved, but the loan growth was tepid.
Profit for the quarter stood at Rs 179.1 crore, which was higher by 41 percent compared with Rs 126.8 crore in year-ago despite lower other income and operating income. It was driven by net interest income, lower provisions and improvement in asset quality.
Net interest income, the difference between interest earned and interest expended, grew by 6.9 percent year-on-year to Rs 2,908 crore for quarter ended September 2017, with slow loan growth (0.3 percent YoY).
"Total advances increased to Rs 3.64 lakh crore in Q2FY18, compared with Rs 3.63 lakh crore in year-ago," the bank said.
Asset quality improved on sequential basis as gross non-performing assets were lower at 12.62 percent for the quarter against 13.05 percent in previous quarter and net NPAs were also lower at 6.47 percent compared with 6.70 percent QoQ.
Numbers were ahead of estimates. Profit was estimated at Rs 16.6 crore and net interest income at Rs 2,724.4 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Other income (non-interest income) during the quarter declined 15 percent to Rs 1,706.4 crore and operating profit fell 10.4 percent to Rs 2,233 crore compared with year-ago.
Provisions and contingencies fell 13 percent sequentially and 15 percent year-on-year to Rs 1,953 crore for the quarter ended September 2017.
Provision coverage ratio at the end of September 2017 improved to 65.2 percent, from 63.5 percent in previous quarter.
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