Canara Bank posts Rs4,860 crore loss in Q4 on higher NPA provisions
For 2017-18, Canara Bank suffered a net loss of Rs4,222.24 crore compared with a net profit of Rs1,121.92 crore in the previous fiscal
Mumbai: State-owned Canara Bank on Friday reported a loss for the fourth quarter (Q4) on account of higher provisions to cover bad loans.
Canara Bank reported a net loss of Rs4,859.8 crore for the three months ended 31 March, as compared to a net profit of Rs214 crore in the year-ago period. Nine analysts polled by Bloomberg had expected a net loss of Rs698 crore.
Lenders have reported a rise in provisions for non-performing loans as a fallout of the Reserve Bank of India’s (RBI’s) 12 February circular withdrawing a host of restructuring schemes and setting a 180-day timeline for resolving stressed loans.
Canara Bank said since the benefits available to loans under the restructuring scheme were revoked as per the revised RBI circular, the accounts were classified as non-performing assets (NPAs).
Provisions and contingencies in the March quarter rose 235% year-on-year to Rs9,075 crore. In the December quarter, provisions were Rs2,674 crore.
The bank said it did not avail the regulatory dispensation available to spread provisions on bond losses as well as on gratuity expense.
Gross bad loans had increased to Rs47,468 crore as of 31 March from Rs40,312 crore in the preceding quarter and Rs34,202 crore a year ago. As a percentage of total loans, gross NPAs increased to 11.84% from 9.63% a year ago. Canara Bank also reported divergence in the reporting of gross bad loans for FY17. It said gross NPAs as of 31 March 2017 were Rs3,248.5 crore lower than the RBI’s assessment.
On Friday, Dena Bank, UCO Bank and Allahabad Bank also reported a cumulative loss of Rs6,869 crore for Q4. All three lenders are under the RBI’s prompt corrective action framework.
On Thursday, shares of Canara Bank fell 0.92% to Rs246.35 on BSE while the benchmark index Sensex rose 0.82% to 35,535.79 points.
- Myntra edges ahead in fashion market share battle, hits $2 billion GMV
- JM Financial ARC seeks to buy out SBI’s loan to Bombay Rayon
- HDFC AMC profit rises 25% to ₹205.26 crore in June quarter
- Tesla’s turmoil doesn’t stop younger investors from buying more
- Government may house Air India debt, non-core assets in SPV
Editor's Picks »
- MakeMyTrip’s attempts to juggle between growth and profitability
- Kerala’s SoS may not have major impact on asset quality of banks
- Subsidy sharing concerns loom for state-run upstream oil firms
- L&T is better off rewarding investors given the poor investment avenues
- Coal India’s share sale plans eclipse bright outlook for FY19