In the initial remarks on Q2FY12 results of Bank of India, ICICI Securities (ISec) says its asset quality has surprised again with more than estimated slippages and provisions. 

The brief report by the broking firm says that Bank of India's asset quality has worsened due to heavy slippages as the bank shifted loans below Rs.10 lakh to system based NPA recognition. It's GNPA has also rose 13% QoQ to Rs. 6548 crore with high slippages of Rs. 4505 crore in H1FY12. Approximately 57% of these slippages were due to migration of sub Rs.10 lakh loans to system based NPA recognition. Write-offs were higher at Rs. 1746 crore, which led to provisions declining and, consequently, a higher rise in NNPA (up 58% QoQ) to Rs. 4245 crore. 

It's quarterly profit has declined 20.4% YoY (5.1% QoQ) to Rs.491.1 crore against Isec's estimate of Rs.528.5 crore on account of high provisions (excluding taxes) of Rs. 1060 crore (up 103.5% QoQ) despite a tax write-back on account of huge write-offs. Sequential business growth was sluggish at 1.6% QoQ (21.3% YoY), while deposits increased 24.1% YoY (2% QoQ) to Rs. 299074.1 crore and advances rose 17.7% YoY (flat QoQ) to Rs. 216950.9 crore. (Share Manthan, November 09, 2011)