Bank of India Q2 net profit at Rs 127 crore

State-owned banking major Bank of India reported a net profit of Rs 126.84 crore for the second quarter ended September.

The bank had reported a net loss of Rs 1,126.24 crore in July-September of 2015-16 on account of higher provision for bad loans as per RBI's asset quality review guidelines.

It had sold 18 per cent in its joint venture Star Union Dai-ichi Life Insurance to the foreign partner.

"During the quarter, the bank has earned profit before tax amounting to Rs 495 crore (Rs 323.69 crore net of taxes) from sale of 18 per cent stake in Star Union Dai-ichi Life Insurance Company Ltd (joint venture of the bank)," it said.

Total income stood at Rs 11,469.11 crore for the quarter ended September 2016 whereas the figure was Rs 11,317.97 crore for the same quarter of the previous fiscal, it said in a regulatory filing.

A decrease in reserves towards bad loans in the form of provisions as well as contingencies at Rs 2,296.22 crore for the quarter under review against Rs 3,237.39 crore a year ago helped.

However, asset quality remained an issue as gross non-performing assets (NPAs) rose to 13.45 per cent of gross advances at the end of September 2016, from 7.55 per cent a year earlier.

Net NPAs or bad loans were 7.56 per cent of net advances for the period under review, up from 4.31 per cent a year ago.

In absolute terms, gross NPAs stood at Rs 52,261.95 crore as on September 2016, from the earlier Rs 29,293.67 crore. Net NPAs were at Rs 27,467.05 crore as against the previous Rs 16,466.48 crore.

The provision coverage ratio of the bank at the end of the second quarter stood at 55.23 per cent, from 55.08 per cent in the year-ago period. The Bank of India stock went up 11.24 per cent to Rs 122.25 on BSE.