Bank of India, the state-owned banking and financial services company, today announced its Q1FY24 financial results, which showed robust growth across multiple key financial indicators. The company reported a significant surge in its net profit to Rs. 1,551 crores, displaying a strong growth YoY. The bank’s operating profit also experienced a solid rise, increasing by 72% YoY to Rs. 3,752 crores.
BOI Q1 FY2024 Earnings from Core Operations
The Net Interest Income (NII) rose by 45% YoY, reaching Rs. 5,915 crores, reflecting the bank’s effective core operations. Further, the bank’s Net Interest Margin (NIM) improved globally by 49 basis points (bps) YoY.
Improved Asset Quality
Importantly, the bank lowered its Gross NPA ratio by 263 bps and the Net NPA ratio by 56 bps YoY, indicating improved asset management.
Growth in Business Metrics and Lending
The bank’s Global Business crossed the remarkable milestone of Rs. 12 lakh crore, with an impressive YoY growth of 8.61%. The bank saw robust growth in Retail Credit, Agriculture Credit, and MSME Credit, indicating strong demand for loans across these segments.
Rise in Low-Cost Deposits
The bank’s CASA deposits experienced a substantial rise, increasing by 7.56% YoY, resulting in a CASA ratio of 44.52%. This highlights the bank’s ability to attract low-cost deposits.
Stable Capital Position
The bank maintained a strong Capital Adequacy Ratio (CRAR) at 15.60% and an impressive CET-1 ratio of 13.02%, showcasing its robust capital position.
The shareholding pattern showed that Mutual Funds and Institutional Investors decreased their holdings, while Promoters’ holding remained unchanged. The bank’s stock has been on a bullish momentum and is outperforming the NIFTY 50 index over the past month.
Concerns
One red flag was the high-interest payments compared to earnings. This is something that the bank needs to address to ensure its profitability remains intact in the long term.
BOI Financials – Last 5 Quarters Compared
| Jun 2023 | Mar 2023 | Dec 2022 | Sep 2022 | Jun 2022 | |
|---|---|---|---|---|---|
| Revenue (Rs. Cr) | 14,442 | 13,548 | 12,796 | 11,545 | 10,043 |
| Interest (Rs. Cr) | 8,467 | 7,948 | 7,144 | 6,433 | 5,915 |
| Expenses + (Rs. Cr) | 4,579 | 6,590 | 5,291 | 5,313 | 4,409 |
| Financing Profit (Rs. Cr) | 1,396 | -990 | 360 | -201 | -281 |
| Financing Margin % | 10% | -7% | 3% | -2% | -3% |
| Other Income + (Rs. Cr) | 1,484 | 3,168 | 1,422 | 1,456 | 1,165 |
| Profit Before Tax (Rs. Cr) | 2,880 | 2,178 | 1,782 | 1,255 | 884 |
| Tax % | 48% | 36% | 35% | 40% | 34% |
| Net Profit (Rs. Cr) | 1,562 | 1,413 | 915 | 853 | 659 |
| EPS (Rs.) | 3.81 | 3.44 | 2.23 | 2.08 | 1.60 |
Over the past five quarters, Bank of India has exhibited solid growth in key financial parameters. Revenue climbed from Rs. 10,043 crores in Jun 2022 to Rs. 14,442 crores in Jun 2023. Financing profit improved from a deficit of Rs. 281 crores in Jun 2022 to a profit of Rs. 1,396 crores in Jun 2023, reflecting better profitability. Other income grew from Rs. 1,165 crores in Jun 2022 to Rs. 1,484 crores in Jun 2023, and pre-tax profits tripled from Rs. 884 crores to Rs. 2,880 crores. Meanwhile, net profit nearly tripled from Rs. 659 crores to Rs. 1,562 crores, with a corresponding rise in EPS from Rs. 1.60 to Rs. 3.81. These trends underline the Bank of India’s robust financial performance and health.
In conclusion, the Bank of India’s Q1FY24 results showcased robust performance and growth across key parameters, reflecting its strong financial health and operational efficiency.
Disclaimer: I personally hold Bank of India in my portfolio
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