Shares of Bank of India witnessed a surge of over 2% on Tuesday, spurred by an alteration in its Marginal Cost of funds-based Lending Rate (MCLR) as revealed in a regulatory filing on Monday, October 30, 2023. The overnight MCLR remained constant at 7.95%, while the one-month to three-year period rate experienced a slight increase, ascending by five basis points. The adjustment was made in accordance with a pricing policy approved by the bank's Board.
In addition to the MCLR modification, the bank's impressive Q1FY24 financial performance also contributed to the positive market response. The bank recorded a substantial year-on-year net profit growth of 176%, amounting to ₹1,551 crore. Concurrently, the Net Interest Income (NII) saw a 45% year-on-year increase, reaching ₹5,915 crore (INR100 crore = approx. USD12 million).
The bank's Current Account Savings Account (CASA) ratio also demonstrated growth, rising by 7.56% year-on-year to reach 44.52%. Meanwhile, the Gross Non-Performing Assets (GNPA) ratio increased by 263 basis points year-on-year to hit 6.67%. On a brighter note, the Net NPA ratio decreased by 56 basis points year-on-year to stand at 1.65%.
As of Tuesday, Bank of India's Q2FY24 earnings are eagerly anticipated by investors and market watchers. In the preceding quarter, the bank reported a net interest margin (NIM) of 3.03%.
InvestingPro Insights
In light of the InvestingPro's real-time data, Bank of India has a market capitalization of $726.27 million and a P/E ratio of 14.43 as of the second quarter of 2023. The bank's revenue for the same period stands at $564.56 million. Despite a slight decrease in revenue growth, the bank has managed to maintain a gross profit of $417.12 million, indicating a gross profit margin of 73.88%.
InvestingPro Tips suggest that while the bank's revenue growth has been accelerating, it is quickly burning through cash, which might be a cause for concern. However, the bank is trading at a low P/E ratio relative to near-term earnings growth, indicating potential for future growth. It's also worth noting that Bank of India has been a prominent player in the banking industry, despite the stock faring poorly over the last month.
These insights, along with hundreds of other InvestingPro Tips, can help investors make informed decisions. For a more comprehensive understanding of the bank's performance and potential, consider exploring the full range of InvestingPro Tips.
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