Bank Of India: Profitability In Q1, Q2 To Get Impacted By COVID
Profitability in the June and September quarters may get impacted due to the Covid19 outbreak, Bank of India (BOI) said.
“Profitability will hopefully improve during the second half of the current financial year,” the bank added.
The public-sector bank has provided the information after the Indian market regulator Securities and Exchange Board of India (Sebi) had asked companies to make detailed disclosures about the impact of the novel coronavirus pandemic on their businesses.
Bank of Baroda (BOB), another public sector lender, had earlier disclosed that around 65% of its customers have opted for a loan moratorium. Sanjiv Chadha, MD, and CEO of BoB had also said the moratorium figures of other public-sector banks should not be very different.
The lender had sufficient liquidity to honor its debt and other financial arrangements. “The demand for banking products may improve during the second half of the current financial year, subject to restoration of normal economic activity,” Bank of India(BOI) said.
“The impact of Covid-19 is different in different territories, based on its severances and category of zone such as red, orange or green,” BoI said. The bank admitted that the outbreak of the Covid-19 pandemic had impacted credit and recovery segments.
“Though there was an impact on recovery, loan default risk has been largely minimized on account of grant of moratorium by the Reserve Bank of India (RBI),” it said.
Although many lenders are providing moratorium to non-banking financial companies (NBFCs) on a case-to-case basis, Bank of India was among the few banks which granted moratorium relief to NBFCs without discrimination. RBI had granted moratorium to borrowers for three months from March 1, which was further extended till August 31 by the regulator.