The state-owned Bank of India expects advances to rise 10-12 percent in the current fiscal year, with corporate loans yet to be picked up, a senior official said in an analyst meeting.

The bank’s year-to-date (YTD) loan growth was around 5 percent, driven primarily by advances in the retail sector, agribusiness and MSME (RAM) loans.

“Advance’s growth forecast will be in the range of 10 to 12 percent for the full year. Through June we had about 5 percent YTD growth, but that’s mostly due to good RAM growth. Corporate is we believe there could be some movement in the corporate book starting this quarter,” AK Das, managing director & chief executive officer (MD&CEO), told analysts on a earnings call following the first quarter of fiscal 23.

The bank’s gross advances (worldwide and domestic) at the end of June 2022 were Rs.4,77.746 crore.

In the first quarter ended June of the current financial year, the lender reported a 22 percent fall in net profit to Rs.561 crore from Rs7.20 million in the same quarter last year.

Radiating confidence that it will not be difficult to meet the loan growth target for 2022-23, Das said the bank expects a domestic net interest margin (NIM) of 2.90 percent and a global NIM of 2.75 percent.

In Q1FY23, the bank’s national and global NIMs were 2.88 percent and 2.55 percent, respectively.

That said there is a lot of loan book reassessment going on on both sides and it would be good if the bank could keep guidance on its NIMs. In terms of asset quality, the bank has set a target of reducing bad loans by Rs. 2,500 crore each quarter.

Of that, Rs 1,700 crore will come from upgrades and cash collections and the rest will come through various OTS (One Time Settlement) schemes already prepared by the lender, said M Karthikeyan, Executive Director.

“We are certain that approximately Rs 3,000 crore will come from NCLT resolutions this year, that is our forecast,” he added.

At the end of June 2022, the bank’s gross non-performing assets (NPAs) improved to 9.30 per cent of gross advances, equivalent to Rs 44,415 crore. By the end of June 2021 it stood at 13.51 per cent (Rs 56,042 crore).

Likewise, net NPAs fell to 2.21 per cent (Rs 9,775 crore) versus 3.35 per cent (Rs 12,424 crore).

New slippages during the quarter at Rs 2,465 crore were down from last year’s Rs 3,528 crore.

For the full year, Bank of India expects slippages not to exceed Rs 8,000 crore. There were also cash reflows of Rs. 1,219 crore, appreciation of Rs. 465 crore and write-down of Rs. 2,340 crore, resulting in a total reduction of Rs. 4,024 crore in the June quarter.

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