BANK OF INDIA - BUSINESS GROWS - BUT NOT PROFIT - IN FY 10

BANK OF INDIA

RESULTS COMPARISON

FY 10 VS FY 09

Interest on Advances/Bills has increased to  Rs. 13103.23 Cr in FY 10 from Rs. 12539.25 Cr in FY 09, an increase of Rs.569 Cr YOY.

Total interest  Earned has also shown a similar increase to Rs.17877.99 Cr in FY 10 from Rs.16347.36 cr in FY 09,an increase of Rs.1531 cr.

Total Income has grown to Rs.20494.62 cr  in FY 10 from Rs.19399.22 cr in FY 09, an increase of Rs.1095 Cr ,YOY.

On the other hand, Interest Expended has also increased to Rs. 12122.04 Cr  in FY 10 from Rs. 10848.45 Cr in FY 09,Rs.1274 Cr, thus more than neutralizing the income growth.

Total Expenditure excluding provisions  has gone up to Rs. 15789.86 Cr in FY 10 from Rs. 13942.42 Cr in FY 09-  an increase of almost  1847 crores YOY.

Provisions has again gone up to Rs. 2210.93 Cr in FY 10 from Rs.1292.37 Cr in FY 09, an increase of Rs.918 Cr, which is considered to be quite High.

Net Profit has therefore come down  to Rs.1741.07 Cr in FY 10 from Rs. 3007.35 Cr in FY 09, a decrease of Rs.1266 cr or 42 percent YOY.

Dividend (%) has therefore been reduced to 70% in FY 10 from 80% in FY 09.

Capital Adequacy Ratio has come down slightly during the year to 12.63 from 13.21 in FY 09.

% of Gross/Net NPA has gone up steeply during the year to 1.31% from 0.44% in FY 09.

Basic EPS has come down in FY 10 to Rs. 33.15 in FY 10 from Rs. 57.26 in FY 09

The Market Price as of now is Rs.348, on which the P/E ratio comes to 10.5.

The quarterly results indicate the qtrly EPS of 8.15 for q/e 03/10; 7.72 for q/e 12/09; 6.16 for q/e-9/09; 11.13 for q/e 06/09 and 15.43 for q/e 03/09. It is nowhere near the highs of 2008 etc.

The bank is aiming for huge expansion and high profitability in current year. It is not clear of the NPA provisions have been completely taken care of. The next quarter wil give the indication if BOI has put an end to the huge NPA story of last year. Or, the Management may come out with its detailed expo on the Road ahead. While, it is a good bank, growing at very good speed, profitability needs to go higher up – to its own  earlier levels and  higher than that.

Next Qtr will give us a clearer indication of current profitability levels.

Note : As always, readers are welcome to offer comments, suggestions and corrections - which will be gratefully taken note of. 

PERFORMANCE HIGHLIGHTS

•Business touched Rs. 4,01,079 Cr

•Aggregate Deposits stood at Rs. 2,29,762 Cr (Growth 21%)

•CASA improved to 31.75% from 30.76% YoY

•Advances at Rs.1,71,317 Cr (Growth 18%)

•Net Interest Margin for YE Mar 2010 is 2.51%

•Net Profit for YE Mar 2010 Rs. 1,741.07 Cr

•Gross NPA Rs. 4883 Cr( 2.85%) and Net NPA Rs. 2242 Cr(1.31%)

•Provision coverage ratio 65.51%

•Basel II CRAR 12.94%

•Net worth improved to Rs. 12,456 Cr  

• Net interest income has gone up by 5% YOY and 8% QOQ.
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 OUTLOOK FOR FUTURE - FY 11

Bank of India expects loans to grow 25 per cent and deposits to rise 23-24 per cent in  FY 2011. (vide a Report dt 7th,May,2010)

Its CMD says - "Demand is expected from mid-corporates, retail, SMEs (small and medium businesses) and infrastructure."

The bank with a capital adequacy of 12.94 per cent, and adequacy of 8.48 percent in the Tier-I segment, has a headroom to raise over Rs 70 billion in case of need to fund loan growth, he said.

The bank with a provision coverage ratio of 65.51 percent as on March 31, 2010, needs to set aside about Rs 2.8 billion to achieve Reserve Bank of India's norm of 70 per cent provision coverage ratio by September.

The bank has sanctioned loans worth 290 billion rupees that are yet to be disbursed.

RESULTS IN FIGURES

AUDITED-CUMULATIVE-NON CONSOLIDATED

Description :: FY 10(Rs. in lakhs)  ::  FY 09 (Rs. in lakhs)

Interest on Advances/Bills :: 1310323 :: 1253925

Income on Investments:: 446430 :: 337031

Interest on Balances With RBI ::  24940 :: 37376

Others :: 6106 ::  6404

Interest Earned :: 1787799  ::  1634736

Other Income    :: 261663  :: 305186

Total Income :: 2049462 :: 1939922

Interest Expended :: 1212204 :: 1084845

Employees cost :: 229607 :: 193741

Other Operating Expenses :: 137175 :: 115656

Operating Expenses :: 366782 ::  309397

Total Expenditure excl.provisions : : 1578986 :: 1394242

O P T ::  470476  :: 545680

Provisions ::  221093 ::   129237

Tax Expense       75276    115708

Net Profit (+):: 174107  :: 300735

Dividend (%) ::  70  :: 80

Face Value (in Rs.):: 10 :: 10

Paid-up Equity :: 52591  :: 52591

Reserves ::  1193008 ::    1061766

Capital Adequacy Ratio :: 12.63 ::  13.21

Basic EPS : 33.15 ::    57.26

Gross/Net NPA :: 220745 :: 62821

% of Gross/Net NPA ::  1.31 :: 0.44

ANNOUNCEMENTS TO EXCHANGE

7-05-2010            Bank Of India has informed the Exchange that the Board of Directors of the Bank at its meeting held on May 07, 2010 has recommended dividend of 70% i.e. Rs. 7/- per share on the face value of Rs.10/- each for the year 2009-10.          -

07-05-2010          Bank of India has informed the Exchange regarding the standalone Results for the year ended on 31-MAR-2010 as follows: Interest earned of Rs. 1787799 lacs for the year ending on 31-MAR-2010 against Rs. 1634736 lacs for the year ending on 31-MAR-2009. Interest expended of Rs. 1212204 lacs for the year ending on 31-MAR-2010 against Rs. 1084845 lacs for the year ending on 31-MAR-2009. Net Profit / (Loss) of Rs. 174107 lacs for the year ending on 31-MAR-2010 against Rs. 300735 lacs for the year ending on 31-MAR-2009.       -

07-05-2010          Bank of India has informed the Exchange regarding the standalone Results for the quarter ended on 31-MAR-2010 as follows: Interest earned of Rs. 452505 lacs for the quarter ending on 31-MAR-2010 against Rs. 449310 lacs for the quarter ending on 31-MAR-2009. Interest expended of Rs. 297336 lacs for the quarter ending on 31-MAR-2010 against Rs. 305975 lacs for the quarter ending on 31-MAR-2009. Net Profit / (Loss) of Rs. 42791 lacs for the quarter ending on 31-MAR-2010 against Rs. 81037 lacs for the quarter ending on 31-MAR-2009.

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