BANK OF INDIA 2023-24 Annual Report Analysis

Wed, 5 Jun

BANK OF INDIA has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

BANK OF INDIA Income Statement Analysis

• Interest income during the year rose 27.4% on a year-on-year (YoY) basis.
• Interest expenses were up by 37.6% YoY during the same period.
• Operating expenses increased by 6.5% YoY during the year.
• The bank's net interest income (NII) increased by 13.8% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 2.9% in FY24 as against 2.9% in FY23.
• Other income declined by 13.6% YoY during the year.
• Net profit for the year increased by 71.0% YoY.
• Net profit margins during the year increased to 10.7% in FY24 from 8.0% in FY23.

BANK OF INDIA Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	479,317	610,733	27.4%
Other Income	Rs m	72,112	62,331	-13.6%
Interest Expense	Rs m	274,406	377,568	37.6%
Net Interest Income	Rs m	204,911	233,166	13.8%
Operating Expense	Rs m	143,735	153,062	6.5%
Pre-provision Operating Profit	Rs m	133,287	142,435	6.9%
Provisions & Contingencies	Rs m	94,466	78,590	-16.8%
Profit before tax	Rs m	60,987	101,931	67.1%
Tax	Rs m	22,166	38,086	71.8%
Profit after tax	Rs m	38,380	65,645	71.0%
Minority Interest	Rs m	-14	-21	-53.2%
Net Interest Margin	%	2.9	2.9
Net profit margin	%	8.0	10.7

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BANK OF INDIA Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 7,406.1 bn as compared to Rs 6,721.9 bn in FY23, thereby witnessing an increase of 10.2%.
• Advances for the year stood at Rs 5,666.4 bn as compared to Rs 4,886.9 bn during FY23, a rise of 16.0%.
• Cost of deposits for BANK OF INDIA rose 20.1% and stood at 4.2%, while yield on advances rose to 7.6%.
• The lender's investments rose to Rs 2,345.9 bn during the year from Rs 2,113.2 bn in FY23.
• Borrowing stood at Rs 809.6 bn, a growth of 24.5% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 9,242.8 bn as against Rs 8,260.4 bn during FY23, thereby witnessing a rise of 11.9%.

BANK OF INDIA Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	604,329	705,813	16.8%
Advances	Rs m	4,886,877	5,666,438	16.0%
Deposits	Rs m	6,721,941	7,406,114	10.2%
Yield on advances	%	6.9	7.6
Cost of Deposits	%	3.5	4.2
Investments	Rs m	2,113,236	2,345,920	11.0%
Borrowings	Rs m	650,152	809,603	24.5%
Total Assets	Rs m	8,260,358	9,242,804	11.9%

Current Valuations for BANK OF INDIA

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 14.4, an improvement from the EPS of Rs 9.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 113.1, stands at 7.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.7 times, while the price to income ratio stands at 0.8 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	116.8	134.1
Earnings per share (Unadj.)	Rs	9.4	14.4
Diluted earnings per share	Rs	8.4	14.4
Avg P/E ratio	Rs	7.7	7.8
Avg P/ABV ratio	Rs	0.6	0.7
Avg Market Cap	Rs	295,252	513,905
Dividends per share (Unadj.)	Rs	2.00	2.80

Ratio Analysis for BANK OF INDIA

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 76.5x during FY24, from 72.7x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 11.64x during FY24, from 12.20x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): BANK OF INDIA's capital adequacy ratio (CAR) was at 17.0% as on 31 March 2024 as compared to 16.3% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 9.3% during FY24, from 6.4% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 0.71% during FY24, from 0.46% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 11.98% during FY24, from 9.43% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. BANK OF INDIA's gross NPA ratio stood at 5.0% as of 31 March 2024 compared to 7.3% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of BANK OF INDIA was 1.2% in financial year 2024. This compared with 1.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	72.7	76.5
Debt to Equity Ratio	x	12.2	11.6
Loans / Deposits	x	0.1	0.1
Capital Adequacy Ratio	%	16.3	17.0
Return on Equity	%	6.4	9.3
Return on Assets	%	0.5	0.7
Return on Capital Employed	%	9.4	12.0
% of Gross NPAs	%	7.3	5.0
% of Net NPAs	%	1.7	1.2
Yield on Advances	x	6.9	7.6
Yield on Investments	x	5.8	6.4

To see how BANK OF INDIA has performed over the last 5 years, please visit here.

BANK OF INDIA Share Price Performance

Over the last one year, BANK OF INDIA share price has moved up from Rs 74.3 to Rs 113.1, registering a gain of Rs 38.9 or around 52.3%.

Meanwhile, the S&P BSE BANKEX is trading at 54,120.1 (up 1.0%). Over the last one year it has moved up from 50,027.6 to 54,120.1, registering a gain of 4,092.5 points (up 8.2%).

Overall, the S&P BSE SENSEX is up 16.8% over the year.

(To know more, you can check out historical annual results for BANK OF INDIA here and quarterly results for BANK OF INDIA here)