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%.

Read More

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.

Read More

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.

Read More

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.

Read More

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.

Read More

Allahabad bank Q2 net loss widens

Allahabad Bank on Friday reported widening of net loss to Rs 2,103.19 crore for the September quarter 2019-20 due to higher provision for bad loans. The state-owned lender had registered a loss of Rs 1,816.19 crore during the year-ago period, according to a regulatory filing.

In the preceding June quarter, the bank clocked a profit of Rs 128 crore.

Total income during July-September 2019 however rose to Rs 4,725.23 crore from Rs 4,492.23 crore in the same period last fiscal, the filing said.

Gross non-performing assets (NPAs) or bad loans increased to 19.05 per cent (Rs 31,467.53 crore) of the gross advances as on September 30, 2019 from 17.53 per cent (Rs 27,236.19 crore) by the same period of 2018.

Net NPAs came down to 5.98 per cent (Rs 8,502.09 crore) from 7.96 per cent (Rs 11,082.74 crore) in the year-ago period, it said.

The provisioning for bad loans spiked to Rs 2,721.97 crore in the second quarter, from Rs 1,991.88 crore in the year-ago period.

During the quarter under review, the bank made additional provision of Rs 1,982.41 crore over and above the provisions required to be made in terms of prudential norms issued by the RBI, to ensure compliance with the PCA norms of the net non-performing advances, it added.

The bank said it made no additional provisioning for the cases admitted under NCLT (list 1 and 2) as per the Insolvency and Bankruptcy Code for the quarter as well as first half ended September of this fiscal as it had already parked Rs 749.51 crore as at March-end 2018 towards these.

The non-performing loan provision coverage ratio of the bank is 79.30 per cent, it said.

"Pursuant to Government of India letter dated August 30, 2019 on amalgamation of PSBs, the board of directors in its meeting held on September 16, 2019 has considered and accorded its in-principle approval for amalgamation of the bank with Indian Bank and commencement of the amalgamation process, subject to all applicable approvals," Allahabad Bank said.

Further, the bank is evaluating the option of lower corporate tax under the amended tax rules.

Read More

UCO Bank net loss narrows in Q2FY20

State-owned Uco Bank has cut net losses by 21.5% at Rs 892 crore for the September quarter on higher net interest income and treasury earnings. It had net loss of Rs 1,136 crore in the year ago period.

Uco's operating profit grew 139% at Rs 1207 crore -- the highest in last 16 quarters, but 44% higher provisions against bad loans at Rs 2034 crore forced the lender to book net losses for the 16th quarter in a row.

The bank's overall asset quality improved with gross non-performing assets ratio falling to 21.87% at the end of second quarter from 25.37% a year back but the lender had to make higher provisions because of fresh slippages of Rs 1378 crore and on account of ageing provisions, managing director AK Goel told ET.

Net NPA ratio improved to 7.32% from 11.97% in the same period. The bank had earlier in the month reported Rs 1223 crore divergence in asset classification as on March.

Our effort will hereon be on how to increase operating profit and net interest income," Goel said. The bank's cost of deposits have fallen to 4.97% from 5.16% with current and savings account ratio to total deposits improving to 40.55% from 36.96%.

Its interest income rose 31.3% at Rs 1266 crore while it booked a trading profit of Rs 368 crore compared with Rs 277 crore in the year ago period.

Goel said his bank has followed the earlier income tax rules for the quarter and half year and is evaluating the option to adopt the new tax rules as amended by the government recently.

"The bank has recognised deferred tax asset of Rs 8,086.37 crore on carry forward losses up to March 31. During the quarter, the bank has recognised deferred tax assets of Rs 542.47 crore," it said in a regulatory filing.

During the second quarter to September 2019 period, the central government infused Rs 2,130 crore by way of preferential allotment of equity shares. With this, Uco's capital adequacy ratio improved to 11.44% from 10.88% three months back.

Read More

Andhra Bank has posts net profit in Q2

Andhra Bank has posted a net profit of Rs 122 crores for the quarter ended September 30, 2019.

This profit accounted for a 35 per cent growth over the first quarter performance ended June, 2019, a bank statement said on Thursday.

The total deposits of the Bank stood at Rs 2,17,970 crore during the quarter as compared to Rs 2,06,697 crore during the same quarter last year by posting 5.45 per cent growth.

The total business of the bank stood at Rs 3,95,068 crore as compared to Rs 3,75,534 crore during the same period last year by posting 5.20 per cent growth.

Net NPAs were 5.95 per cent as compared with 5.73 per cent at the end of March 2019, the statement added.

The Bank has 2876 number of branches (rural 749, SU 763, Urban 652 and Metros 712) and 4 extension counters, and 3798 number of ATMs/BNAs/CRs. The total number od delivery channels of the Bank was 6678.

Agricultural Credit registered a Year-on-Year growth of 7.73 per cent and stood at Rs 35,961 crore, the statement added.  

Read More