Mumbai: Dena Bank’s loss widened to Rs575.26 crore for the March quarter from Rs326.28 crore a year earlier as asset quality deteriorated.
Net interest income (NII), the difference between interest earned on loans and that paid on deposits, fell 28% from a year ago to Rs450.07 crore in the March quarter from Rs625.71 crore. Other income rose 46% to Rs314.97 crore from Rs215.87 crore a year ago.
The bank set aside Rs972.04 crore during the quarter to cover bad loans, against Rs900.94 crore a year ago and Rs484.43 crore in the preceding December quarter.
According to Ashwani Kumar, chairman and managing director of Dena Bank, slippages for the March quarter stood at Rs2,321 crore, compared with Rs1,635 crore in the year-ago period.
Of the Rs2,321 crore, Rs1,400 crore slipped from 25 accounts—which included Videocon, Ruchi Soya and Jaypee Cements worth Rs520 crore, Rs125 crore and Rs91 crore, respectively.
The bank has breached the asset quality conditions under the Reserve Bank of India’s (RBI’s) prompt corrective action (PCA).
RBI has mandated a maximum net NPA ratio of 6% under the PCA framework, and breaching it could result in the central bank asking lenders to sell assets, cut unsecured exposures and so on.
Net NPA ratio at the end of the fourth quarter for the bank stood at 10.66% from 9.52% in the third quarter.
“This year we will not open any branches and will merge the one in close vicinity... There will no fresh headcount,”added Kumar, when asked about the corrective action plan taken by the bank under the PCA framework.
According to a notification on stock exchange, the bank is looking to raise tier-I capital of up to Rs1,800 crore.
Gross non-performing assets (NPAs) as a ratio of gross advances were at 16.27%, against 14.79% as of 31 December, while capital adequacy ratio as on 31 March stood at 11.39% against 11% a year earlier.
“Credit growth will remain muted for public sector banks which will subdue the profitability. Capital infusion by the government will remain inadequate going forward,” said Karthik Srinivasan, senior vice-president, ICRA.
Vijaya Bank posted a net profit of Rs203.99 crore for the year ended quarter, compared with Rs71.31 crore a year ago, helped by lower provisions and higher net interest income.
NII rose 48% to Rs989.49 crore in the March quarter, compared with Rs668.35 crore a year ago.
Provisions stood at Rs432.08 crore in the March quarter, compared with Rs416.95 crore in the previous quarter and Rs653.27 crore in the year-ago period.
Gross NPAs as a ratio of gross advances for Vijaya Bank were at 6.59%, against 6.98% as of 31 December.
According to a notification on the stock exchanges, the bank has received board approval to raise Rs1,000 crore through tier-I capital.
Syndicate Bank reported a net profit of Rs103.84 crore for the March quarter, compared with a loss of Rs2,158.17 crore a year ago. Provisions stood at Rs1,268.20 crore, compared with Rs784.74 crore as on 31 December. NII increased by 27.3% to Rs1,861.01 crore, compared with Rs1,461.82 crore a year ago. Gross NPAs as a ratio of gross advances were at 8.50%, against 8.69% as of 31 December.
Shares of Dena Bank lost 5.61% to close at Rs44.60 on Tuesday on BSE, while the benchmark Sensex gained 0.02% to close at 29,933.25 points. Vijaya Bank gained 4.36% to close at Rs92.25, while Syndicate Bank gained 0.55% to Rs91.50.