Bank of India sees impact on recoveries, profitability due to COVID-19
The impact of COVID-19 is different in different territories, based on its severances and category of zone such as Red, Orange or Green, Bank of India said in a disclosure to bourses.
Market regulator Sebi last month had asked companies to make detailed disclosures about the impact of coronavirus pandemic on their businesses.Reiterating that banking has been allowed as an essential services during lockdown since late March, the banker said the outbreak of COVID-19 pandemic had impacted credit and recovery segments. Advertisement
"Though there was an impact on recovery, loan default risk has been largely minimized on account of grant of moratorium on repayment of loans and other measures to reduce the interest burden by Reserve Bank of India (RBI).
"Due to postponement of repayment of principle and interest from 1st March 2020 to 31st August 2020, our recoveries may get affected in Q2 onwards. Due to this revenue and provisioning of the bank may get affected for later quarters," it said in the disclosure.However, with the measures being taken by the central government and various state governments, position is expected to improve.
On profitability, Bank of India said it may get impacted during the first and second quarter of this fiscal due to lockdown of economic activities.Hopefully, profitability will improve during second half of the current financial year subject to restoration of normal economic activity, it added. On its capital and financial resources, the bank said that it is not foreseeing any capital and liquidity constrains on account of impact of COVID-19. Advertisement
The lender also informed that there is no liquidity constraints because of the timely measures taken by the RBI and government.
"Bank is having sufficient liquidity to honour its debts and other financial arrangements. The RBI has also opened its window to provide liquidity to MSME and other borrowers. Further, the bank is also continuously mentioning its asset liability management position and other requirement.Bank of India said demand for product/services may improve during the second half of the current financial year subject to restoration of normal. Advertisement
Bank of India shares closed 9.68 per cent higher at Rs 34.55 on BSE. KPM MR MR
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