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Indian Overseas Bank(IOB) reduce loss in Q2 on lower provisions
State-owned Indian Overseas Bank (IOB) on Friday
reported narrowing of its net loss to Rs 487.26 crore in the second quarter
ended September 2018 on lower provisioning.
The bank had
registered a net loss of Rs 1,222.50 crore in the year-ago period. Sequentially
also, its net loss narrowed from Rs 919.44 crore in the first quarter ended
June of the current fiscal.
"Net loss
is due to provisions on bad debts and investment and not due to
operations," the bank said in a release. Total income fell to Rs 5,348.35
crore during July-September 2018-19 from Rs 5,610.35 crore in same period a
year ago, IOB said in a regulatory filing.
Bank's asset quality
deteriorated with the gross non-performing assets (NPAs) rising to 24.73
percent of gross loans by the end of the second quarter as against 22.73
percent as on end-September 2017. Though it was down when compared sequentially
from 25.64 percent at end-June.
Net NPAs also rose
year-on-year to 14.34 percent from 13.86 percent, sequentially down from 15.10
percent.In absolute terms, gross NPAs were Rs 37,109.96 crore as on September
30, 2019 from Rs 34,708.59 crore by September 2017. Net NPAs or bad loans were
Rs 18,876.05 crore as against Rs 18,949.55 crore.
Provisions for bad
loans and contingencies came down to Rs 2,016.60 crore for the reported quarter
from Rs 2,238.09 crore.IOB said it received
government capital infusion of Rs 2,157 crore on July 23 against preferential
allotment of equity shares and has added the same as tier I equity capital. The provision coverage
ratio of the bank as on September 30 stood at 61.97 percent. Deposits as on
September 30, 2018 stood at Rs 2.23 lakh crore and advances were Rs 1.50 lakh
crore.
Total business
registered an increase of 3.12 percent and stood at Rs 3.73 lakh crore by the
end of September 2018 against Rs 3.62 lakh crore as on June 30, 2018. IOB said its total
recovery registered an increase of 12.53 percent to Rs 4,462 crore for quarter ended
September as against the recovery of Rs 3,965 crore a year ago.
The total fresh
slippage for quarter ended stood at Rs 884 crore from slippage of Rs 2,693
crore a year ago. "Recovery
achieved is substantially higher than slippages during the quarter mainly due
to focused efforts towards recovery and containment of NPAs (fresh slippage and
other debits in existing NPA accounts)," it said.
Further,
the bank has recovered Rs 247 crore in six NCLT accounts during the September
quarter and expects further recovery aggregating Rs 802 crore in the third
quarter in two NCLT accounts where resolution is at an advanced stage.
ICICI Bank profit declines 56%, misses estimates
ICICI Bank Ltd on Friday said its second quarter net profit dropped 55.84% on the back of lower other income and higher gross non-performing assets.
The bank posted a net profit Rs 908.88 crore for the three months ended 30 September, compared with Rs 2,058.19 crore in the year-ago period. Profit was lower than Rs 949.30 crore estimated by a Bloomberg poll of 20 analysts.
Other income, which includes core fee income, dropped 39.14% to Rs 3,156.49 crore in the three months, from Rs 5186.24 crore a year ago.
Gross non-performing assets grew 22.48% to Rs 54,488.96 crore during the second quarter, against Rs 44,488.54 crore in the same period last fiscal.
Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 12.41% to Rs 6,417.58 crore, from Rs 5,709.07 crore.
Gross non-performing assets (NPAs), as a percentage of total advances, were at 8.54% in the September quarter, compared with 8.81% in the June quarter and 7.87% a year ago. Provisions during the quarter decreased 11.30% to Rs 3,994.29 crore, against Rs 4,502.93 crore in the year-ago quarter. In the April-June quarter, the bank had set aside Rs 5971.29 crore as provisions.
Post-provision, the net NPA ratio was at 3.65% against 4.19% in the April-June quarter and 4.43% in the year-ago quarter.
Fake bank apps may have stolen data of thousands of customers: Report
Fake apps of SBI, ICICI, Axis Bank, Citi and other leading banks are available on Google Play, which may have stolen data of thousands of bank customers, claims a report by IT security firm Sophos Labs.
These
fake android apps have logo of respective banks which makes it difficult for customers to differentiate between the
fake and original apps, it said. The report further said that the deceptive malware in these apps may
have stolen thousands of customers' account and credit card details.
When contacted some of the banks mentioned in the report said they have not come across any such
fake apps. However, some banks have started inquiry and also informed the
CERT-In -- the national nodal agency for responding to computer security
incident. The
fake apps target total seven banks like SBI, ICICI, Axis, Indian Overseas, BoB, Yes Bank and Citi Bank, the report said.
Another lender Yes Bank said it has informed the bank's cyber fraud department about the matter. However, the country's largest lender State Bank of India's response was awaited. There were no immediate comments from ICICI Bank and Axis Bank.
According to the report, the apps lured victims to download and use
them, either by masquerading as Internet apps or e-wallets, promising
rewards, including cash back on purchases, free mobile data or interest
free loans.
Some even claimed to be providing a too-good-to-be-true service,
enabling users to withdraw cash from an ATM and have it delivered to
their doorstep.
"Deceptive malware may have stolen thousands of Indian sub-continent
bank customers account data or credit card numbers," said Pankaj Kohli,
threat researcher, SophosLabs.
Fake apps are not new to Android and this sort of malware will continue to find its way into the android
app store, it said.
"Some are blatant copies of real apps, while a few are much more
dangerous as they seed malware and steal data from user accounts. Users
should always use antivirus software, which provides malware protection and internet security to keep users protected and stop these
fake apps from stealing data," it said.
Source- Economic Times
Source- Economic Times
BoB-Dena-Vijaya Merged Bank to get growth capital
The government will provide an additional capital cushion to the proposed merged bank to be formed by amalgamation of Bank of Baroda, Dena Bank and Vijaya Bank to start the new bank on a stronger footing, a senior government official told ET.
“We will like to have a cushion of at least 50-100 basis points
above the existing regulatory capital requirements. The bank will be
provided with that growth capital,” he added. The actual capital
infusion requirement in money terms will be available only after
financials of the July-September quarter are available.
In September, the government had proposed a merger of the three banks to create the country’s third biggest lender.Capital adequacy ratio (CAR) will reach 11.5% in 2019 under Basel III
norms, and according to government data, the proposed combined entity
had CAR of 12.25% by the end of June 2018.
“This may be further impacted as these banks finish their due
diligence and make provisioning for other requirements. If we want the
combined entity to have a credit growth of 15%, we will need growth
capital,” the official quoted earlier, said.
The amalgamation will be the first three-way consolidation of banks
in India, with a combined business of Rs 14.82 lakh crore. The
government expects synergies to lead to larger distribution network and
more business for the new lender. The government has started the
exercise to look at capital requirements of all PSBs and has been
holding meetings with their top deck.
“We may have to give some support to Dena Bank in this fiscal if it
falls short of regulatory requirements. For now, the other two lenders
look good in terms of provisioning requirements,” said a finance
ministry official.
Last year, the government had announced a Rs 2.1 lakh crore bank
recap plan of which Rs 1.35 lakh crore was to be given through
re-capitalisation bonds, and the balance Rs 58,000 crore was to be
raised from the market by the banks.
So far, the government has infused Rs 70,000 crore through recap
bonds, and the balance Rs 65,000 crore will be given in this fiscal. In
July 2018, Rs 11,336 crore was infused in five PSBs to help them
maintain regulatory norms.
Source- Economic Times
BoB, Vijaya Bank, Dena Bank set up panels to merge operations
Bank of Baroda (BoB), Dena Bank and Vijaya Bank have decided to set up internal committees, which will help integrate their functions before the merger happens, said a person familiar with the development. In a meeting on Wednesday, the bankers also decided to appoint three separate valuers to arrive at share swap ratios, the person said, adding that the valuer appointed by one bank will also evaluate the other two banks, before a common ratio is arrived at and sent to the government. This was the second meeting after the merger announcement.
The committees will comprise the chief executive officers (CEOs) and executive directors of the three banks. “We have decided to form a few internal committees to integrate functions in the three banks. They include committees on credit, human resources (HR) and information technology (IT),” the person said, requesting anonymity.
Mint had reported on 3 October that although the three banks use the Finacle core banking solution developed by Infosys Ltd, they have different versions of the software. While Dena Bank and Vijaya Bank are on Finacle 7.2, Bank of Baroda had recently upgraded to Finacle 10.2.
On 10 September, the government had proposed the merger of the three state-owned banks. The merged entity, comprising two relatively stronger banks and a weak one, will be the third-largest lender in India, after State Bank of India and HDFC Bank Ltd, with a total business of ₹14.82 trillion.
Following the merger announcement, the managements had assured the staff that the government has decided to retain the banks’ individual identities even after the bank merger.
Analysts were wary of the human resource complications. A research report by Kunal Shah of Edelweiss Securities said challenges on human resources, process integration, branch rationalization and management bandwidth, will pose integration risks. “Roadblocks, for example, due to agitation from employees cannot be ruled out.”
A Kotak Institutional Equities note said that the merged entity will have 2,205 branches in western India, while the south and north will have 846 and 713 branches, respectively.
This is the third major restructuring in the public sector banking space by the government. The first was the merger of the five associate banks of SBI with itself. The merger had resulted in a sharp jump in the combined entity’s bad loans portfolio, crimping its profit. The associate banks made a loss of ₹5,792 crore for the March quarter of 2016-17 and ₹10,243 crore for the entire year. This resulted in the consolidated net profit of SBI going down to a mere ₹241 crore, while the stand-alone net profit was ₹10,484 crore.
Source - Livemint
Yes Bank Q2 profit falls 4%
Yes Bank Ltd on Thursday reported a 3.8% decline in its September quarter as bad loans continued to mount and provisions soared.
The bank reported Rs2620.69 crore exposure to troubled Infrastructure Leasing & Financial Services Ltd as of September 2018.
Net profit for the quarter stood at Rs964.70 crore against Rs1002.73 crore a year ago. According to 18 Bloomberg analyst estiamtes, the bank was expected to post a profit of Rs1,273.80 crore.
Provisions and contingencies soared 110.26% to Rs939.98 crore in the quarter from Rs447.06 crore a year ago. On a quarter-on-quarter basis, they surged 50.2% from Rs625.65 crore. Other operating expenses jumped 40.1% to Rs930.59 crore.
Net interest income (NII), or the core income a bank earns by giving loans, was up 28.25% to Rs2,417.55 crore versus Rs1,885.09 crore last year. Other income was at Rs1,473.45 crore, up 18% from Rs1,248.44 crore a year ago.
Gross non-performing assets (NPAs) was up 42% to Rs3,866.08 crore at the end of the September quarter from Rs2,720.34 crore in the same quarter last year.
As a percentage of total loans, gross NPAs fell to 1.6% as compared with 1.82% in the year-ago quarter. Net NPAs were at 0.84% against 1.04% a year ago.
Advances for the quarter grew 61.2% to Rs2.40 trillion while deposits rose 41.05% to Rs2.23 trillion.
Recently Yes Bank reported to exchanges that Reserve Bank of India denied a three-year extension to its chief executive officer Rana Kapoor and asked him to step down after 31 January 2019.
Oriental Bank of Commerce(OBC) posts profit in Q2
Oriental Bank of Commerce(OBC) on Thursday reported a profit of Rs
101.74 crore for the second quarter ended September 30, despite increase in bad
loans. It had reported a net loss of Rs 1,749.90 crore in the corresponding
July-September quarter of 2017-18, OBC said in a BSE filing.
However, total
income of the state-owned lender declined to Rs 4,967.29 crore during the
quarter, as against Rs 5,511.70 crore in the same period of 2017-18.
Asset quality
dented further as gross NPAs, as a percentage of gross advances, hit 17.24 per
cent by the reported quarter as against 16.30 per cent as on September 30,
2017. In absolute terms, NPAs stood at Rs 25,673.31 crore against Rs 26,431.86
crore.
Net NPAs rose to
10.07 per cent (Rs 13,795.23 crore) of the net loans by end of September
quarter 2018-19 from 9.44 per cent (Rs 14,128.29 crore) in the year-ago period.
However, total
provisioning eased to Rs 1,073.75 crore for the quarter, down from Rs 3,146.92
crore a year ago. At the end of the
reported quarter, the capital adequacy ratio of the bank stood at 10.35 per
cent as compared to 10.60 per cent in the same period a year ago.
The bank further said
RBI grants banks an option to spread provisioning for mark to market (MTM)
losses on investments held in bonds for the June quarter 2018 equally over up
to four quarters, commencing with the first quarter.
"Accordingly,
during the quarter and half-year ended September 30, 2018, Rs 144.34 crore and
Rs 288.68 crore ,respectively have been charged to the profit and loss account
towards such MTM losses and the balance unamortised MTM loss as on September 30
is Rs 288.68 crore," it said.
