Bank of India (BOI) has downgraded the Kingfisher airline account as non-performing asset (NPA)

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on its books and classified GTL as a restructured account.

Kingfisher Airlines has outstanding dues of about Rs 535 crore to the bank. “We will decide the future course of action on the account in consultation with the company,” a senior bank official said.

On Friday, BOI reported 9.6 per cent rise in net profit to Rs 716.15 crore on the back of robust growth in its non-interest income (NII), which grew 31.48 per cent to Rs 852.20 crore. The growth in non-interest income (NII) was led by the recovery of written-off accounts to Rs 185.80 crore from Rs 65.80 crore, profit from sale of securities, which rose 20.27 per cent to Rs 71.2 crore.

The bank’s operating profit for the quarter rose 24.7 per cent to Rs 1,732 crore from Rs 1,389 crore in the corresponding period a year ago. Net interest margin (NIM) improved sequentially to 2.55 per cent in the third quarter ended December 31, 2011.

Alok Mishra, chairman and managing director of Bank of India, said: “We hope to improve our operating margins to achieve a NIM of 3 per cent. We are yet to take a call on whether we will bring down our deposit or lending rates. For now we will continue to hold our rates.”

N Seshadri, executive director, said: “Most of the bad loans has been provisioned off in the last quarter itself.” Gross advances of the bank reached Rs 2,33,115 crore registering an increase of 20.9 per cent.

The company reported gross NPAs at Rs 6,386 crore during the period compared with Rs 6,548 crore in the previous quarter. Capital adequacy ratio of the bank stood at 11.18 per cent.