MUMBAI (Reuters) - Bank of India Ltd does not expect any additional bad loans in the current quarter on a net basis, its chief said on Thursday, as India’s sixth-biggest lender by assets reported its second consecutive quarter of profit after a stretch of losses.
The state-run lender booked a net profit of 1.02 billion rupees ($15 million) for the three months to Dec. 31, compared with a net loss of 15.06 billion rupees a year earlier.
Gross bad loans as a percentage of total loans as at the end of December eased to 13.38 percent from 13.45 percent as at September-end.
For the fourth quarter through March, the bank expects gross bad loan additions of about 35 billion rupees but also recoveries and upgradations by an equal amount, effectively adding no bad loans on a net basis, Chief Executive Officer Melwyn Rego told Reuters after the results.
A surge in bad loans had seen the lender report losses for four straight quarters to last June.
Rego said the bank’s loans will likely grow 5-6 percent for the full year to March, adding it was increasing its share of retail loans and cutting exposure to companies as part of a strategy to check bad loans and accelerate growth.
The bulk of bad loans in India are from industries led by metals and power. The bank’s share of loans to corporates has fallen to 52 percent from 56 percent when Rego took the helm in August 2015, he said, while retail loans have increased to 48 percent.
Bank of India, which raised 5.4 billion rupees by selling a stake in a life insurance joint venture last year, was looking to raise another up to 3 billion rupees by March by selling assets it considers non-core, Rego said.
($1 = 66.9600 Indian rupees)
Reporting by Devidutta Tripathy