State-owned Bank of India reported a 90% year-on-year jump in net profit to Rs 1,027 crore for the quarter ended December on account of lower provisions.

The bank's total provisions were down 81% YoY to Rs 335 crore. Net interest income (NII) fell 8.8% to Rs 3,408 crore in the fiscal third quarter ended December 31. Sequentially, NII was down 3.2% at Rs 3,523 crore in the September quarter.

Net interest margin declined 2.27% from 2.58% in Q3FY21 and 2.42% in Q2FY22.

“Much higher loan growth holds the key to a positive NII. From a credit-deposit ratio of 65%, we have reached over 70%; we have seen a 5.4% growth in advances compared to 1-2% growth in the previous two quarters too. We have made a beginning and the growth in Q3 and Q4 will definitely do much better NII and NIM in Q4 and the whole fiscal," said Bank of India CEO AK Das.

Non-interest income fell 3.26% YoY to Rs 1,835 crore in the December quarter from Rs 1,897 crore a quarter ago. Sequentially, it fell 14.1% from Rs 2,136 crore in the quarter ended September 2021.

Bank of India’s asset quality improved with gross non-performing assets (NPAs) declining to 10.46% in December 2021 from 13.25% a year ago and from 12.2% a quarter ago. The bank expects to bring down gross NPAs below 10% by March 2022, Das said.

Net NPAs, however, rose to 2.66% in the December quarter from 2.46% a year ago. Sequentially, it was lower at 2.79%.

Loans of Rs 1,845 crore slipped into NPA category in the December quarter, higher than Rs 1,307 crore a quarter ago.

The provision coverage ratio stood at 86.86% as on December 31 compared to 89.32% a year ago and 87.81% a quarter ago.

Advances grew 5.40% YoY to Rs 4,37,399 crore. The bank expects retail and agriculture loans to push advances by 7-8% in FY22.

Domestic deposits grew 1.84% YoY to Rs 5.45 trillion in December 2021.