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Bank of India Q2 net rises 80% on robust credit growth

Bank of India reported an 80 per cent growth in second quarter net profit, beating analysts’ predictions.The bank’s net profit increased to Rs 763 crore from Rs 425 crore in the year-ago period. Analysts tracking the bank had predicted a 33-35 per cent growth in bottom line, in view of the rising cost of funds. However, the bank’s net interest margin (NIM) improved marginally to 3.2 per cent from 3.04 per cent, despite the cost of deposits increasing to 5.79 per cent from 5.53 per cent in the year-ago period. The average yield on advances fell marginally to 9.79 per cent from 9.99 per cent. The bank has made a provision of Rs 108.6 crore for the exposure to bonds of troubled Lehman Brothers in the second quarter.

Bank of India net surges 78% on core operations, NPA management

While several public sector banks reported flat growth in profit and some even losses, Mumbai-based Bank of India’s net profit surged by 78 per cent to Rs 562 crore in the quarter ended June 30, 2008, against Rs 315 crore in the corresponding period last year. The bank achieved this by focusing on core banking operations, prudent NPA management and keeping the investment portfolio to the minimum. Net interest income grew 25 per cent, deposits grew 30 per cent and advances rose 39 per cent. However, Bank of India, like its peers, also saw a depreciation of Rs 129 crore on its Government securities portfolio, in view of the rising interest rates and bond yields. But the bank was able to show profits by shifting Rs 2,200-crore worth Government securities to the Held to Maturity (HTM) portfolio from Allowed for Sale (AFS), at the beginning of year in April, said Mr T.S. Narayanasami, Chairman and Managing Director. “Close to 88 per cent of our investment portfolio is in HTM. Therefore, the...

Stocks to Buy

Stocks to buy: Bharti Airtel, Indiabulls Fin Services, Bank of India, HDFC Bank (The Economic Times 28th Jan 2008)) Research By Stock CMP Target Recommendation Motilal Oswal Indiabulls Fin Services Rs. 779 NA Buy Morgan Stanley Bank of India Rs 395 Rs 525 Overweight Edelweiss HDFC Bank Rs 1,601 NA Buy More