Why Bank of India Share Price is Falling

Last week, shares of PSU banks took a hit, with Canara Bank, Punjab National Bank, and Bank of Baroda leading the decline.

The downside was an impact of RBI's draft circular proposing tighter guidelines on project financing.

This week, stocks of two PSU banks are again in red - Union Bank and Bank of India. Both stocks are down more than 5% today.

While Union Bank is down more than 7%, Bank of India is down more than 10%

So, what's causing the decline in the stock price?

Let's find out...

Disappointing Q4 Results Sends Stock Crashing

Shares of Bank of India tumbled over 11% to Rs 123 intraday today after the bank announced its results for the March 2024 quarter and financial year 2024.

The bank saw an increase in provisions which impacted its bottom line. This was against an increase in slippages.

Slippages soared to Rs 23.1 bn from Rs 13 bn in the December 2023 quarter. The agriculture and MSME sectors contributed to over 50% of the slippages.

Provision for bad loans increased to Rs 20.4 bn, as against Rs 5.5 bn earmarked during the same quarter a year ago. The provision coverage ratio of the bank stood at 90.59% at the end of March.

However, on the asset quality side, the bank's gross non-performing assets rose to 4.98% of gross advances from 7.31% at the end of March 2023.

Net NPAs also declined to 1.22% of the advances, from 1.66% at the end of 2023.

With respect to income, the net interest income (NII) of the bank grew by 7.5% year on year (YoY) to Rs 59.4 bn from Rs 5.5 bn. Margins, however contracted to 3.3%.

Overall, the bank posted a 7% YoY rise in net profit at Rs 14.4 bn.

For the financial year ended March 2024, the bank's net profit increased 57% YoY to Rs 63.2 bn, compared to Rs 40.2 bn a year earlier after accounting for wage settlement and one-time exceptional item of Rs 71 bn.

The company made provisions of Rs 54 bn for estimated liability on account of pension and Rs 17 bn on account of benefits to pre-November 2002 retirees and family pensioners.

Total income of the bank increased 22% YoY to Rs 668 bn in FY24 as against Rs 547 bn in FY23.

The bank remains adequately capitalised with a capital adequacy ratio (CAR) of 16.96%. It stood at 16.28% and the end of March 2023.

The board recommended a dividend of Rs 2.8, or 28%, per equity share.

How Bank of India Share Price has Performed Recently

In the past five days, shares of the company have fallen more than 15%.

However, the stock is up 15% in the past six months and around 58% in the year gone by.

The stock touched its 52-week high of Rs 839.6 on 9 May 2024 and a 52-week low of Rs 543.15 on 26 October 2023.

At the current price, the stock trades at a price to book value multiple of 1.9x.

About Bank of India

Bank of India is a public sector bank.

The bank's segments include treasury operations, wholesale banking and retail banking.

Corporate & others category account for 37% of the domestic loan book, followed by Retail (18%), MSME (17%), Agriculture (15%), and government advances (13%).

Presently, the company operates 5,083 branches and 5,690 ATMs across India. It also operates 23 branches in other countries.

For more details about the bank, you can have a look at Bank of India company fact sheet and quarterly results on our website.

For a sector overview, you can read our banking sector report.

You can also compare Bank of India with its peers on our website:

Bank of India vs Bank of Baroda

Bank of India vs Indian Bank

Bank of India vs SBI

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