Bank of Baroda underreported bad loans by ₹5,250 crore in FY19: RBI report

Public sector lender Bank of Baroda (BoB) underreported bad loans by ₹5,250 crore for the financial year 2018-19, according to Reserve Bank of India’s risk assessment report.

In a filing to the stock exchanges late on Tuesday, the public-sector lender said the divergence in gross non-performing assets (NPAs) assessed by the central bank stood at ₹5,250 crore in FY19. The divergence in net NPAs was also ₹5,250 crore for the fiscal.

Also, the divergence in provisioning for bad loans in FY19 was to the tune of ₹4,090 crore. Of the ₹4,090 crore divergence in provisions for NPAs, the bank had already made provision of ₹1,475 crore during the current financial year which reduces the impact to ₹2,615 crores, the statement said.

The bank’s net loss for the year ending 31 March, 2019 widened to ₹10,998 crore from ₹8,339 crore after taking into account the divergence in provisioning.

The divergence highlighted by the RBI’s risk assessment report are for the amalgamated entity -- Bank of Baroda, erstwhile Dena Bank and erstwhile Vijaya Bank. On 1 April, 2019, Bank of Baroda merged with two other state-owned banks, Dena Bank and Vijaya Bank.

The public sector lender had reported ₹737 crore in net profit for the quarter ended 30 September, almost five times higher than the same period last year on the back of higher other income. 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.

At 1040am, shares of Bank of Baroda were down 2.7% at ₹99.45 apiece on the BSE from its previous close.