Bank of India (BANKINDIA) Q4 00/01 earnings summary

Executive summary

• FY ended 31 Mar 2001 operating profit was Rs.1,102.14 crore, up 61.37% YoY; net profit was Rs.251.87 crore, up 45.75%, after Rs.330.13 crore of VRS expense. Excluding VRS expense, net profit was Rs.582 crore, up 236.79%.

• A full prudential provision of Rs.134.46 crore was made for probable losses from the pay order crisis; profit would have been higher by that amount without the provision.

• Deposits grew 8.24% YoY to Rs.51,678 crore, while global advances rose 20.95% to Rs.31,823 crore.

Financial highlights

• Interest earned rose to Rs.5,316.86 crore from Rs.4,736.98 crore; other income rose to Rs.861.91 crore from Rs.785.54 crore.

• Net interest income was Rs.1,653.83 crore, up 27.82% YoY; total interest expended increased 6.39% to Rs.3,663.03 crore.

• Operating expenses were Rs.1,743.73 crore, including VRS costs; provisions and contingencies were Rs.520.14 crore, versus Rs.510.17 crore in FY 1999-2000.

• Balance-sheet total assets were Rs.59,566.57 crore, up from Rs.55,638.08 crore; investments stood at Rs.18,224.87 crore and advances at Rs.31,823.14 crore.

Outlook and guidance

• Plans included installing around 200 ATMs over two years and networking about 275 branches across nine cities; internet and mobile banking were described as near-term opportunities.

• Administrative restructuring effective 1 Jun 2001 was intended to shorten decision times, improve operating efficiency and reduce costs; branch reporting was to move to about 47 zones, with regional-office layers removed.

• Investment in technology, staff capability and customer-specific products was identified as a priority; performance-based staff incentives were planned.

• NPA recovery efforts under the RBI one-time settlement scheme would continue through its extended period to 30 Sep 2001.