BOI: Margins continue to rise - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

BOI: Margins continue to rise

Jul 15, 2002

Bank of India (BOI) has declared strong first quarter performance on the back of a sharp improvement in operating margins. The bank's net profits jumped by 47% YoY to Rs 1.8 bn in 1QFY03. Its interest income however, grew at a slower pace of 6% to Rs 14 bn.

(Rs m)1QFY021QFY03Change
Income from operations 13,326 14,122 6.0%
Other Income 1,991 2,864 43.9%
Interest expense 9,211 9,429 2.4%
Net interest income 4,115 4,693 14.0%
Other expenses 3,702 3,762 1.6%
Operating Profit 413 931 125.4%
Operating Profit Margin (%)3.1%6.6% 
Provisions and contingencies 700 1,423103.4%
Profit before Tax 1,704 2,37239.2%
Tax 500 60120.1%
Extraordinary items - - -
Profit after Tax/(Loss) 1,204 1,77247.2%
Net profit margin (%)9.0%12.5% 
No. of Shares (m) 638.0 488.1  
Diluted Earnings per share*9.914.5 
P/E Ratio 2.1 
*(annualised)   

During the quarter, the bank's operating margins increased to 6.6% from 3.1% in the comparable previous year. The bank's VRS initiative launched last year, is reflected positively in 1QFY03's financial performance, as its cost to income ratio declined to 50% from 52% in FY02. BOI wrote off Rs 340 m in 1QFY03 (Rs 400 m in 1QFY02) towards VRS expenses. which is included in operating expense. The bank aims to go for a second round of VRS, which would further improve its efficiency and bring down costs.

The bank's income from both advances and investments slowed down significantly in 1QFY03. Stiff competition from private banks coupled with a downturn in economy impacted the bank's income growth. The bank's core interest income witnessed a marginal rise of 7%. Non-food credit growth is expected to pick up in the current fiscal which could give some boost to this stream of revenues. The growth in fee based income was however strong at 44%, forming 17% of total income.

Income breakup
(Rs m)1QFY021QFY03Change
Interest on advances 8,095 8,635 6.7%
Income from investments 4,395 4,800 9.2%
Interest on balance with RBI 799 685 -14.3%
Others 37 1 -96.5%
Total 13,326 14,122 6.0%

At the current market price of Rs 31, the stock is trading at an unadjusted price to book value ratio of 0.6x and P/E of 2x 1QFY03 earnings. Valuations of the bank will be re-rated once its asset quality and employee productivity improves.


Equitymaster requests your view! Post a comment on "BOI: Margins continue to rise". Click here!

  

More Views on News

BANK OF INDIA Announces Quarterly Results (2QFY20); Net Profit Up 123.0% (Quarterly Result Update)

Nov 4, 2019 | Updated on Nov 4, 2019

For the quarter ended September 2019, BANK OF INDIA has posted a net profit of Rs 3 bn (up 123.0% YoY). Sales on the other hand came in at Rs 107 bn (up 9.1% YoY). Read on for a complete analysis of BANK OF INDIA's quarterly results.

How the YES Bank Collapse Unfolded - 10 Points (Sector Info)

Mar 9, 2020

A timeline of how YES Bank went from a stock market darling to a pariah.

Today's Stock Market Crash: 10 Points (Sector Info)

Mar 6, 2020

Top factors that dragged the markets lower today.

BANK OF INDIA Announces Quarterly Results (1QFY20); Net Profit Up 155.1% (Quarterly Result Update)

Jul 31, 2019 | Updated on Jul 31, 2019

For the quarter ended June 2019, BANK OF INDIA has posted a net profit of Rs 2 bn (up 155.1% YoY). Sales on the other hand came in at Rs 103 bn (up 3.2% YoY). Read on for a complete analysis of BANK OF INDIA's quarterly results.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

BANK OF INDIA SHARE PRICE


Sep 21, 2020 (Close)

TRACK BANK OF INDIA

  • Track your investment in BANK OF INDIA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

BANK OF INDIA - VIJAYA BANK COMPARISON

COMPARE BANK OF INDIA WITH

MARKET STATS