Bank of India shares plunge 11% as Q4 margins face decline

New Delhi: Bank of India shares fell more than 11 percent to Rs 123 on May 13 after the lender's margins deteriorated by 23 basis points (bps) year on year (YoY) in the January-March quarter (Q4 FY24).

Morgan Stanley analysts gave the company an 'overweight' rating following the fourth quarter results, with a target price of Rs 124 per share. The stock has risen about 10 percent year to date in 2024 and more than 58 percent in the last year.

During the March quarter, the bank's net interest income (NII) also witnessed a 7 percent uptick, reaching Rs 5,937 crore compared to Rs 5,523 crore in Q4FY23. However, domestic net interest margins (NIMs) slipped to 3.3 percent in Q4FY24 from 3.59 percent in Q4FY23.

There was a positive development in terms of asset quality, with the gross non-performing asset (NPA) ratio declining to 4.98 percent in the March quarter from 5.35 percent in Q3FY24 and 7.31 percent in Q4FY23. Similarly, the net NPA ratio improved to 1.22 percent as of March 2024 compared to 1.41 percent as of December 2023 and 1.66 percent as of March 2023.

For the full fiscal year 2023-24, Bank of India's net profit surged by 57 percent to Rs 6,318 crore compared to Rs 4,023 crore in the previous fiscal. The NII for the entire year also recorded a notable increase of 14% year-on-year, reaching Rs 23,053 crore.

In a separate announcement, the Bank of India's board approved a proposal to raise capital upto Rs 5,000 crore through the issuance of Basel III-compliant additional Tier I and Tier II bonds, each amounting to Rs 2,500 crore. Additionally, the board recommended a dividend of Rs 2.8 per equity share with a face value of Rs 10 each for the financial year 2023-24.

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