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My View On Bank Of India

About The Company
Bank of India (BoI) is considered to be one of the more efficient public sector. It is one of the banks in India having a strong international presence. It was incorporated in 1906 and was nationalised in 1969 along with 13 other major banks. The bank came out with its maiden public issue in 1997. In terms of business volumes, it occupies a premier position among nationalised banks. It was the first Indian bank to open a branch outside the country. Currently, it has 2,622 branches in India . During the past few years, it has strengthened its information technology infrastructure, undertaken business process re-engineering, net worked branches and computerized all its branches. Its global business has grown to Rs 2,63,488 crore in FY08 from Rs 2,05,176 crore in FY07, a growth of 28% YOY.
About The Finaincials
BOI delivered a 24% growth in NII to Rs.1181 crores from Rs.947 crore contributed by a 39% surge in advances and 30% jump in deposits. BOI’s global yields on advances of 9.15% for Q1FY09 was slightly lower than 9.39% in Q1FY08 and on other side cost of funds has gone up from 5.02% to 5.13% in Q1FY09, both putting negative pressure on NIMs making it fall from 2.96% to 2.89% during same period. The CASA (current account saving account) for the bank for Q1FY09 declined to 34% Vs 36% as the hike in deposits rates made term deposits attractive leaving CASA deposits growth at 21% y-o-y.

BOI has one of the lowest cost to income ratios at 39% for Q1FY09 as compared to 50% a year earlier. These have contributed to a operating profit jumping 58% y-o-y. The operating efficiency can also be inferred from business per employee improved by 37% over Q1FY08 and business per branch improved by 216% over same period. Also the bank witnessed a strong traction on the non interest income front which grew by 49% from Rs. 381 crores in Q1FY08 to Rs.385 crores in Q1FY09. This was led by a robust growth in the commission/exchange/brokerage (CEB) segment, which witnessed a growth of 53%y-o-y. Also the rise in Non interest income can be attributed to the cash recovery from w/off accounts that jumped 335% to Rs. 87 crores. Bank of India (BOI) continued the uptrend with PAT growth of 78% to Rs.562 crores, surprising everybody.
About The Stock
The banking pack as a whole is under pressure and is expected to underperform in the coming days , so it would be better to stay away from the counter as a whole.
Disclaimer : I do not have any personal holding in this stock.