Result Analysis: Bank of India (CMP: Rs.90) Result Update: Q3FY23

Bank of India is one of India’s leading government owned commercial bank which provides range of banking products and financial services to retail and corporates segment. The bank operates through majorly three segments i.e. treasury operations, wholesale banking and retail banking. It has currently more than 5100 branches spread across all states and UTs in India and has overseas presence in 18 foreign countries with 45 offices.

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    Stock Details
    Market Cap. (Cr.) 40133
    Equity (Cr.) 4104
    Face Value 10
    52 Wk. high/low 104 / 40
    BSE Code 532149
    Book Value (Rs) 123.93
    Sector Banks


    Key Ratios
    ROE (%): 7.48
    TTM EPS: 7.79
    P/BV: 0.8
    TTM P/E: 12.55

    Result Highlights:

    • Bank of India has reported 54% YoY and 17% QoQ increase in the consolidated net profit for the December quarter’ 22 to Rs.1,159 cr.

    • Operating profit of the bank grew by 74% YoY and 8.2% QoQ to Rs.3,652 cr. mainly due to higher interest income and reduced employee cost.

    • For FY23, Net Interest Income of the bank grew by 64.5% YoY and 10.5% QoQ to Rs.5,651 cr. Net Interest Margin increased by 24bps on QoQ and 101bps on YoY basis to 3.28%.

    • Banks’s total advances grew to Rs.4.79 lakh cr. by 18.6% YoY in Q3FY23 compared to Rs.4.04 lakh cr. in Q3FY22.

    • Total deposits aggregated to Rs.6.56 lakh cr. as of December 31, 2022, a growth of 5% over Rs.6.25 lakh cr. for the same period of FY22 and a growth of around 0.9% over Rs.6.5 lakh cr. as of September 30, 2022.

    • On yearly basis, retail advances grew by 20.95%, MSME advances grew by 8.27%, corporate advances and agri advances grew by 18.68% and 9.15% respectively.

    • CASA deposits grew by 3.7% YoY to Rs.2.47 lakh cr. with savings account deposits at Rs.2.14 lakh cr. and current account deposits at Rs.32.6 lakh cr.

    • The Bank’s CASA ratio has increased sequentially and yearly by 44bps and 49bps respectively in Q3FY23 at 44.56%.

    • Cost to Income ratio of the bank has declined notably from 60.03% in Q3FY22 to 48.03% in the current quarter.

    • Asset quality of the bank has improved significantly; Gross NPA has decreased by 280bps to 7.7% and Net NPA ratio decreased by 105bps to 1.61% for the Q3FY23. Bank has added 818cr. in the total slippages vs 1037 cr. in the previous quarter.

    • Bank has added 16 branches and 94 ATMs in the quarter, aggregated to total 5139 branches and 8166 ATMs.

    • The bank is looking to raise Rs.1,500 cr. through QIP issue soon.


    Financial Performance:


    Shareholding Pattern:

    Particulars %
    Promoters & Promoter Group 81.41
    FIIs 2.19
    DIIs 10.72
    Public 5.01
    Others 0.67


    Bank of India reported strong growth in the profits and healthy asset quality figures in the December quarter’22 with the consolidated PAT at Rs.1,159 cr. and NII at Rs.5,651 cr. growth of ~17% and 64.5% on YoY basis. Asset quality of the bank has also improved sequentially as well as yearly with GNPA at 7.66% and Net NPA at 1.61%. Management of the bank expects, 11%-12% credit growth in FY23 and sustainable growth in the profit going forward. Bank of India has delivered the earnings of Rs.5.91 in the last 9 months and we expect the bank to close FY23 at the estimated EPS of Rs.7.88. The P/BV of the bank terms to be at 0.7x at the current market price of Rs.90 and on the basis of expected earnings the PE of the bank stands at 11.47x on CMP.


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ% YoY% 9M FY23 9MFY22 FY22
    Interest earned 12,796 11,545 9,423 10.8% 35.8% 34,384 28,378 38,281
    Interest Expended 7,144 6,433 5,987 11.1% 19.3% 19,493 18,196 24,083
    Net Interest Income 5,651 5,112 3,436 10.5% 64.5% 14,891 10,182 14,197
    Operating Profit 3,677 3,182 2,083 15.5% 76.5% 9,068 7,519 10,038
    Provisions 1,894 1,928 357 -1.7% 430.8% 5,148 2,911 4,464
    Net Profit after tax 1,159 752 992 54.1% 16.9% 2,494 2,762 3,406
    Deposits 6,49,960 0.9% 5.0% 6,56,096 6,25,077 6,29,981
    Advances 4,62,591 3.5% 18.6% 4,78,876 4,03,925 4,23,001


    Ratios (%) Q3FY23 Q2FY23 Q3FY22 QoQ% YoY%
    Gross NPA 7.66 8.51 10.46 -85 bps -280 bps
    Net NPA 1.61 1.92 2.66 -31 bps -105 bps
    Provision Coverage Ratio 90.27 88.96 86.86 131 bps 341 bps
    Net Interest Margin 3.28 3.04 2.27 24 bps 101 bps
    Capital Adequacy Ratio 15.6 15.51 16.66 9 bps -106 bps
    CASA Ratio 44.56 44.12 44.07 44 bps 49 bps
    Slippage Ratio 0.27 0.3 0.47 -3 bps -20 bps
    Source: Company website, EWL Research

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