Bad loans push six PSBs to combined Rs 15,962 cr Q4 loss
New Delhi/BENGALURU/MUMBAI: Six Indian state banks reported a combined net loss of Rs 15,962 crore ($1.74 billion) for the fiscal fourth quarter due to a jump in bad-loan provisions following a tightening of the Reserve Bank of India rules.
Bengaluru-headquartered Canara Bank Ltd, the biggest of the six, said its net loss was Rs 4,860 crore for the three months to March 31, compared with a net profit of Rs 214 crore a year earlier.
Allahabad Bank reported a net loss of Rs 3,510 crore and UCO Bank a Rs 2,134 crore loss. Union Bank of India, also state-run, reported a Rs 2,583 crore net loss for the fourth quarter.
Oriental Bank of Commerce (OBC) reported a net loss of Rs 1,650.22 crore for the quarter ended March of 2017-18.
Dena Bank, the smallest of the six, made a net loss of Rs 1,225 crore.
Indian banks, already burdened by a near-record Rs 9.5 lakh crore of soured loans as of last year, were expected to report a further rise in bad loans in the March quarter after the central bank withdrew half a dozen loan-restructuring schemes and tightened some rules in February.
The government owns majority stakes in 21 lenders that account for the bulk of the sector's bad loans, forcing the government to announce a $32 billion bailout package to help the lenders set aside funds for the soured loans and kickstart new lending.
Canara Bank's gross non-performing loans as a percentage of total loans rose to 11.84 per cent at the end of March, compared with 10.38 per cent in the preceding quarter and 9.63 per cent a year earlier. Provisions for non-performing assets almost tripled from a year earlier to Rs 8,763 crore.
Allahabad, UCO and Dena also saw their bad loans and provisions for bad loans rise sharply in the quarter.
Top state lenders State Bank of India, Punjab National Bank, Bank of Baroda and Bank of India are due to report fourth quarter results in the coming days.
Meanwhile, the OBC had made a net loss of Rs 1,218.01 crore during the corresponding quarter of the preceding fiscal ended March 2017.
Total income of the bank during January-March quarter of 2017-18 came down to Rs 4,689.12 crore as against Rs 5,093.84 crore, OBC said in a BSE filing.
Asset quality of the bank worsened with net non-performing assets (NPAs) rising to 10.48 per cent of the net advances as on March 31, 2018 against 8.96 per cent reported a year ago.
Gross NPAs or bad loans as a percentage of gross advances at the end of March 2018 stood at 17.63 per cent, up from 13.73 per cent a year ago.
Bank's provisioning for bad loans stood at Rs 2,419.47 crore in the quarter under review against Rs 3,050.60 crore a year ago.
Without naming anyone, Oriental Bank of Commerce said, in respect of two gems and jewellery borrower group, where fraud was declared by some banks, the bank has fully provided for the entire funded exposure.
Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems are wanted in connection with the alleged over Rs 13,000-crore fraud at Punjab National Bank (PNB). Other banks too have declared direct/indirect exposure to Nirav Modi and Gitanjali Gems. Their role in the alleged fraud is being investigated by multiple agencies.
For the full financial year, the bank reported a net loss of Rs 5,871.74 crore. It had registered a net loss of Rs 1,094.07 crore in the preceding 2016-17 fiscal.
Total income in the entire 2017-18 fiscal stood at Rs 20,181.25 crore, lower from Rs 21,187.85 crore a year ago.