Central Bank of India reports higher loss for FY19 due to NPA divergence

Central Bank of India has reported an increased net loss of Rs 6,430.48 crore for 2018-19 due to NPA divergence after assessment of higher bad loans by the Reserve Bank. The net NPA divergence -- the difference between the NPAs reported by the bank and that assessed by the RBI -- was at Rs 2,565 crore for 2018-19. Central Bank of India had reported a net loss of Rs 5,641.48 crore in 2018-19 earlier. "The adjusted (notional) net profit after tax for the year ended March 31, 2019 after taking into account the divergence in provisioning is (-) Rs 6,430.48 crore," the bank said in a regulatory filing. Banks are required to report divergences in their asset classification and provisioning as per Sebi guidelines issued on October 31, 2019.

The bank had reported Rs 11,333.24 crore net NPAs during the year while the RBI assessed it at Rs 13,898.24 crore, leaving a gap of Rs 2,565 crore. The divergence in provisioning also increased by Rs 788 crore for the fiscal ended March 2019. Market regulator Sebi has put in place tighter disclosure norms, directing all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving RBI's risk assessment report, rather than waiting to publish the details in their annual financial statements.

Banks, including Indian Bank, Union Bank of India, Bank of India, Indian Overseas Bank and Lakshmi Vilas Bank, have already reported their NPA divergences for the last fiscal. The disclosures need to be made in case the banks' additional provisioning for non-performing assets (NPAs) assessed by the RBI exceeds 10 per cent of the reported profit before provisions and contingencies, and if the additional gross NPAs identified by the RBI exceed 15 per cent of the published incremental gross NPAs.

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Bank of India, IOB report NPA divergences; losses widen for FY19

State-owned Bank of India and Indian Overseas Bank have reported divergences in their bad loans for the fiscal ended March 2019, resulting into widening of net losses for the year.

Chennai-headquartered Indian Overseas Bank has reported a net non-performing asset (NPA) divergence of Rs 358 crore for 2018-19, due to which the divergence in provisioning came in at Rs 2,208 crore, according to a regulatory filing by the bank.

The bank has an adjusted loss of Rs 5,999.88 crore in the fiscal ended March 2019, higher than Rs 3,737.88 crore reported earlier, due to the divergence.

Banks have to report the divergence in asset classification and provisioning for NPAs as per Risk Assessment Report of RBI subject to certain conditions, which is the gap between the bad loans as declared by the lenders and that assessed by the regulator.

Bank of India on the other hand had a fall in its net NPA divergence by Rs 329 crore for 2018-19, because the NPAs reported by the bank were higher than that assessed by the RBI.

However, the lender's net loss for the year expanded to Rs 6,992.90 crore from Rs 5,546.90 crore reported by the bank due to divergence in provisioning requirement.

The bank's divergence in provisioning for the year was at Rs 1,446 crore, Bank of India said in the regulatory filing.

Earlier this month, market regulator Sebi had put in place tighter disclosure norms, and directed all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving RBI's risk assessment report, rather than waiting to publish the details in their annual financial statements.

Some banks, including Indian Bank, Union Bank of India and Lakshmi Vilas Bank, have already reported their NPA divergences for last fiscal.

The disclosures need to be made in case the banks' additional provisioning for non-performing assets (NPAs) assessed by the RBI exceeds 10 per cent of the reported profit before provisions and contingencies, and if the additional gross NPAs identified by the RBI exceed 15 per cent of the published incremental gross NPAs.

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Union Bank of India posts net loss in Q2 due to higher provisioning for bad loans

Union Bank of India on Thursday said its second quarter net loss stood at Rs1,194 crore on account of higher provisioning.

The bank posted a net loss of Rs1,194 crore for the quarter against a profit of Rs139 crore a year ago.

Loss was higher as Bloomberg poll of 7 analysts had estimated a loss of Rs293.5 crore.

"The primary reason for the loss is divergence in provisions of Rs1,587 crore for FY19 as specified by the Reserve Bank of India (RBI). This was taken into account in this quarter," said Rajkiran Rai G., chief executive, Union Bank of India.

The bank’s loans to Dewan Housing Finance (DHFL) of around Rs2,000 crore has turned NPA in the third quarter of FY20 or in the current quarter, he added.

Net interest income, or the difference between interest earned on loans and that paid on deposits, for Jul-Sep quarter increased 16.5% to Rs2,906 crore from Rs2,494 crore in the corresponding period last year.

Other income, which includes core fee income, increased 27.10% to Rs1,143.2 crore in the three months from Rs899.44 crore a year ago.

Gross non-performing assets (NPAs), as a percentage of total advances, were at 15.24% in the September quarter compared with 15.18% in the June quarter and 15.74% in the year-ago quarter.

Post-provision, the net NPA ratio was at 6.98% against 7.23% in the Apr-Jun quarter and 8.42% in the year-ago quarter.

Capital Adequacy ratio of the bank under Basel III is 15.14% as on September 30, 2019 as against 11.43% as on June 30, 2019 compared to minimum regulatory requirement of 10.875%.

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IDBI Bank Q2 net loss narrows; asset quality improves

IDBI Bank Ltd on Friday said its second quarter net loss narrowed to ₹3,459 crore on the back of higher net interest income and other income. The bank posted a net loss of ₹3,602.49 crore in the year-ago period.

Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 25.42% to ₹1,631.48 crore from ₹1,300.86 crore in the corresponding period last year.

Other income, which includes core fee income, gained 28.08% to ₹1,032.66 crore in the three months.

CASA deposit increased 15.49% to ₹1.04 trillion as on 30 September, against ₹90,071 crore for the same quarter last year.

Earlier this year, insurance behemoth Life Insurance Corporation of India (LIC) acquired 51% controlling stake in IDBI Bank, marking the entry of the more than 60-year old state-owned insurer into the banking space.

The bank said net interest margin (NIM) improved 53 basis points (bps) to 2.33% during the quarter.

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City Union Bank Q2 net up by 15%

City Union Bank (CUB) posted a 15 per cent growth in second quarter net profit ₹194 crore. The bank's net profit for the same period last year stood at Rs 168 crore.

The bank reported a net profit of Rs 186 crore for the June quarter. Operating profit, driven by non interest income, grew 17 per cent for the September quarter to ₹346 crore as against ₹296 crore recorded for the same period last year.

While the bank's interest income grew by 12 per cent to Rs 1,037 crore (Rs 926 crore) during Q2FY20, non interest income grew by 64 per cent to Rs 195 crore (Rs 119 crore) for the same period. Asset quality of the bank remained stable despite a marginal increase in the bank's gross non-performing assets (GNPA).

The bank's GNPA as a percentage of total advances stood at 3.41 per cent (2.85 per cent) as on September 2019. While Net non-performing assets (NNPA) stood at 1.90 per cent (1.69 per cent).

"The incremental NPAs is from across all sectors and it's almost similar to what we saw in the last few quarters," N Kamakodi, MD & CEO, City Union Bank said in a press conference held here to announce the quarterly results.

He also added that the bank's incremental slippage for the quarter is around Rs 190 crore and total recovery from live accounts and technically written-off accounts is around Rs 115-120 crore. CUB's advances for the quarter grew by 12 per cent to ₹33,279 crore (₹29,785 crore as of September 2018), while total deposits went up by 17 per cent to ₹40,451 crore (₹34,534 crore).

Provision coverage ratio for the September quarter remained stable at 65 per cent while capital adequacy ratio stood at 15.49 per cent.

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Lakshmi Vilas Bank Q2 net loss widens

Private sector Lakshmi Vilas Bank on November 9 reported a net loss at Rs 357.17 crore for the quarter ending September 30, 2019.

The Tamil Nadu based bank had clocked net loss at Rs 132.30 crore during the year-ago period.

For the six month period ending September 30, net loss was at Rs 594.42 crore as against Rs 256.17 crore in the same period last year. Total income for the July-September quarter was at Rs 665.33 crore as against Rs 800.50 crore, the bank said in a press release.

For the half-year period ending September 30, total income was at Rs 1,342.50 crore as against Rs 1,588.00 crore in the year-ago period.

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Next meeting of Bipartite Settlement for bankers on 15th Nov

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Bank of Baroda(BoB) Q2 net profit rises five-fold

Public sector lender Bank of Baroda (BoB) on Friday reported a net profit of ₹737 crore for the three months to September, almost five times higher than the same period last year on the back of higher other income.

The bank's profit was higher than ₹165.4 crore estimated by a Bloomberg poll of 19 analysts.

BoB's other income was buoyed by trading gains of ₹942 crore in the quarter, compared to ₹138 crore in the same period last year.

Its net interest income, or the difference between the interest earned on loans and paid on deposits, increased 10.09% to ₹7,028 crore in Q2 FY20. The bank's net interest margin (NIM), a measure of profitability, stood at 2.81%, up 19 basis points (bps) on a sequential basis.

On 1 April, 2019, Bank of Baroda merged with two other state-owned banks, Dena Bank and Vijaya Bank.

Gross non-performing assets (NPAs),as a percentage of total advances, were at 10.25% in the September quarter and net bad loan ratio was at 3.91%.

The bank saw slippages of ₹6,001 crore in the second quarter of FY20. These were primarily driven by a few chunky accounts, the bank's management told reporters on Friday.

"Loans to two non-banking financial companies (NBFCs), one textile and one plastic company have slipped in the quarter. The exposure to these two NBFCs is ₹2,000 crore" said S L Jain, executive director, Bank of Baroda.

Jain added that the bank's total real estate exposure is at ₹15,000 crore and exposure to troubled mortgage lender Dewan Housing Finance Corp Ltd (DHFL) is about ₹2,000 crore.

The bank reported provisions of ₹4,209 crore in the September quarter, up 6.9% year-on-year (Y-o-Y), of which ₹3,425 crore was for bad loans.

The public sector lender's domestic advances grew 2% Y-o-Y to ₹5.33 trillion, led by retail loan growth of 16.2% Y-o-Y. It's domestic deposits grew 4% Y-o-Y to ₹7.83 trillion.

"Our focus will be on retail loans and in the corporate segment, we will try to have 80% of our corporate loans in AAA and AA-rated companies," said Murali Ramaswami, executive director, Bank of Baroda

Following the end of PS Jayakumar's term last month, the bank does not have a chief executive.

It's capital adequacy ratio under Basel III norms stood at 12.98% at the end of the September quarter.

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