Public sector lender Bank of India turned black in the quarter ended June 2017, with profit at Rs 87.7 crore driven by strong other income, operating income and lower provisions.

The bank had reported a loss of Rs 741.3 crore in June quarter 2016.

Net interest income fell 8.7 percent year-on-year to Rs 2,533 crore compared with same quarter last year, which missed analysts' expectations.

According to average of estimates of analysts polled by CNBC-TV18, the loss was estimated at Rs 75.5 crore and net interest income at Rs 3,077.5 crore for the quarter.

Asset quality improved on sequential basis as gross NPA (non-performing assets) fell to 13.05 percent (from 13.22 percent QoQ) and net NPA declined to 6.7 percent (from 6.9 percent) in the quarter ended June 2017.

In absolute terms, gross NPAs stood at Rs 51,019 crore, lower by 2 percent quarter-on-quarter and net NPA dropped 3.7 percent to Rs 24,370 crore in Q1FY18.

Provisions for bad loans halved to Rs 2,245 crore from Rs 4,736 crore on sequential basis and declined 19 percent year-on-year. Provision coverage ratio improved to 63.48 percent in Q1FY18, from 61.5 percent in Q4FY17.

Other income (non-interest income) during the quarter jumped 30 percent to Rs 1,610.96 crore compared with same quarter previous fiscal.

Operating income shot up 44 percent year-on-year to Rs 2,379.43 crore due to sharp fall in employee costs (down 28.5 percent).

Bank of India said it has reversed Rs 196.6 crore of unrealised interest in stressed accounts.

At 13:06 hours IST, the stock price was quoting at Rs 157.35, up Rs 4.65, or 3.05 percent amid high volumes on the BSE.

Posted by Sunil Shankar Matkar