Bank's provision coverage ratio improved to 83.74 percent at the end of March 2020, compared to 77.2 percent as of December 2019.
Public sector lender Bank of India on June 25 has reported a net loss of Rs 3,571.4 crore in the quarter ended March 2020, largely due to higher provision, though the tax write-back capped the losses.
The bank had registered a profit of Rs 251.8 crore in the corresponding period of last fiscal.
Net interest income during the quarter declined 6.2 percent to Rs 3,793 crore compared to the year-ago, while the net interest margin (global) declined by 3 basis points to 2.90 percent YoY.
Provisions and contingencies more than doubled to Rs 8,141.9 crore in March quarter 2020 compared to Rs 4,015.2 crore in the previous quarter, but year-on-year the increase was significant at 329 percent due to additional provisions.
"In Q4FY20 due to uncertainty of recovery, additional provision of Rs 3,941.36 crore has been made in 6 NPA accounts," said Bank of India in its BSE filing.
In respect of RBI referred NCLT accounts (List 1 & 2), as on March 2020, bank said it held 100 percent provision of the outstanding value of Rs 3,959.34 crore, while it had made additional provision of Rs 271 crore in four Accounts, where the viable Resolution Plan has not been implemented within 180 days of review period.
But the bank's provision coverage ratio improved to 83.74 percent at the end of March 2020, compared to 77.2 percent as of December 2019.
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Asset quality improved given the lower slippages. Gross non-performing assets (NPA) as a percentage of gross advances fell 150 bps sequentially to 14.8 percent and net NPA dropped 210 bps QoQ to 3.9 percent in Q4FY20.
Bank of India said slippages at the end of March quarter 2020 stood at Rs 2,764 crore, against Rs 6,716 crore in December quarter.
"Q4 slippages were down 58.8 percent QoQ. We have hit the bottom in terms of provisions but NCLT recovery remains uncertain," said AK Das, MD & CEO in an interview to CNBC-TV18.
"The bank's focus was mostly on PSU & PSU-backed entities for loan growth and we expect loan growth of 8-9 percent for FY21," he added. "We expect pressure on net interest margin to continue and credit cost to be around 1.5 percent for FY21."
Non-interest income during the quarter grew by 14.1 percent to Rs 1,687.76 crore YoY, supported by a rise in treasury income, said the bank, adding pre-provision operating profit increased 15.2 percent to Rs 2,652.56 crore YoY.
The bank has reported a tax write-back of Rs 1,918 crore for Q4FY20, against expenses of Rs 154 crore in the corresponding period last year.
The stock was trading at Rs 53, down 3.46 percent on the BSE at 14:19 hours IST.
