Weak Core Business reported by Bank of India
Bank of India has slipped on key operational in March 2010 quarter, among the top five banks, exactly on areas where analysts were worried about. The bank improved its coverage from 59.1 percent at the end of September 2009 quarter and in fact, its provision coverage ratio at 65.5 percent is still short of the 70 percent minimum advised by the Reserve Bank of India. According to the Bank officials and the experts m the bank has posted a decline net profit due to the high provisioning for the NPA’s and the net profit of the Bank has declined by 47 percent and reported to be Rs 428 crore and during the quarter which ended on 31st March, 2010, which has registered Rs 810 crore as net profit for the same quarter in the preceding year.
While net interest income inched up 5 percent, operating profit the weak performance of four quarters led the bank to a disappointing end of FY10 compared to FY09. CASA ration , as a result ,, yield on advances declined faster by 156 basics points compared to cost of funds fall of 128 points , thanks to increase in low cost accounts. All this led to a a decline of 9 percent in operating profit to Rs 1,275 crore.