Karur Vysya Bank Q3 net profit drops

KARUR VYSYA BANK has reported net sales of Rs.1702.65 crores during the period ended December 31, 2018 as compared to Rs.1632.50 crores during the period ended September 30, 2018.

KVB has posted net profit of Rs.21.20 crores for the period ended December 31, 2018 as against Rs.83.74 crores for the period ended September 30, 2018.

The bank ha reported EPS of Rs.0.27 for the period ended December 31, 2018 as compared to Rs.1.05 for the period ended September 30, 2018.

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Andhra Bank's net loss widens in Q3

State-owned Andhra Bank on Monday said its net loss widened to Rs 578.59 crore in the third quarter ended December 31, as bad loans surged. The bank had posted a net loss of Rs 532.02 crore in the October-December quarter previous fiscal.

Also read- Results of all Public & Private Sector banks in India for Q3FY19 

Total income, however, rose to Rs 5,322.33 crore for the third quarter of 2018-19 as against Rs 5,093.43 crore in same period last year, Andhra Bank said in a regulatory filing.

Provisions for bad loans during the quarter were raised to Rs 1,790.17 crore, from Rs 1,744.99 crore parked for the same period last fiscal.

The bank witnessed its asset quality deteriorating as gross non-performing assets (NPAs) or bad loans ballooned to 16.68 per cent of gross advances by December-end 2018, compared to 14.26 per cent.

In absolute value, the gross bad loans were Rs 28,703.47 crore as against Rs 21,599.32 crore.Net NPAs, however, were trimmed to 6.99 per cent (Rs 10,778.36 crore) by end of the third quarter as against 7.72 per cent (Rs 10,858.32 crore) a year ago.

The provision coverage ratio as on 31st December, 2018 stood at 68.47 per cent, Andhra Bank said.

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Corporation Bank swings into the black with profit in Q3

Corporation Bank has swung into the black with a profit of Rs 60.53 crore in December quarter 2018, as provisioning for bad loans saw a sharp decline, the lender said Monday. The bank had posted a net loss of Rs 1,240.49 crore in October-December 2017-18.

Total income of the lender came down to Rs 4,112.32 crore in the latest quarter as against Rs 4,841.37 crore in the same period of 2017-18, it said in a regulatory filing.

The bank said its provisioning for non-performing assets (NPAs) or bad loans was reduced to Rs 842.28 crore for the latest quarter as against Rs 2,494.71 crore in the same period a year ago.

Also read- Q3FY19 Results of all Public & Private Sector banks in India 

However, the bank's assets worsened with gross NPAs growing to 17.36 per cent of gross advances as at December-end 2018, against 15.92 per cent by December 2017.

In value terms, gross NPAs were at Rs 21,921.42 crore as against Rs 21,817.96 crore earlier. Net NPAs surged to 11.47 per cent (Rs 13,521.22 crore) from 10.73 per cent (Rs 13,853.90 crore).

The bank said it is maintaining higher provision in terms of NCLT (list 1 and 2 of RBI) and is holding a total provision of Rs 6,412.45 crore against outstanding amount of Rs 9,075.69 crore (or 70.66 per cent) on these accounts as on December 31, 2018.

Provision coverage ratio of the bank as at December-end 2018 is 66.13 per cent, Corporation Bank said.

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UCO Bank net loss drops marginally in Q3FY19

State-owned UCO Bank on Friday reported a marginal drop in its net loss at Rs 998.74 crore for third quarter ended December 31, 2018, as bad loans and provisions ballooned.

The bank had posted a net loss of Rs 1,016.43 crore in the same quarter of the previous fiscal.

Total income of the bank also came down to Rs 3,585.56 crore during the October-December period of 2018-19, as against Rs 3,721.93 crore in same quarter of 2017-18, the bank said in a regulatory filing.

The Kolkata-headquartered lender, witnessed worsening asset quality as the gross non-performing assets (NPAs) ballooned to 27.39 per cent of gross loans as on December 31, 2018, from 20.64 per cent in December 2017.

Sequentially also, NPAs were higher from 25.37 per cent by end of second quarter ended September of this fiscal.

Also read- Q3FY19 Results of all Public & Private Sector banks in India 

In value terms, the gross NPAs or bad loans stood at Rs 31,121.79 crore as on December 31, 2018 as against Rs 25,382.40 crore a year-ago.

Net NPAs were 12.48 per cent by end of third quarter as against 10.90 per cent. Value-wise, the net NPAs were Rs 11,755.61 crore, lower than Rs 11,923.45 crore last year.

Thus, provisioning for bad loans during the quarter that ended on December 2018 were hiked to Rs 2,243.85 crore as against Rs 1,682.40 crore a year earlier. The non-performing loan provisioning coverage ratio is 69.49 per cent as on December 31, 2018, UCO Bank said.

The bank said in respect of select borrower accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), it was required to make additional provision where provision as per Income Recognition and Asset Classification (IRAC) norms lower than the provision required.

“Accordingly, the bank has made additional provision of Rs 242.60 crore in respect of select borrower accounts for the quarter ended December 2018,” it said. The bank also suffered losses due to depreciation in investment, UCO Bank said.

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Home, auto loans set to be cheaper as RBI Governor Shaktikanta Das cuts interest rates by 0.25%

RBI Governor Shaktikanta Das cut the interest rate by 0.25 percent to 6.25 percent, a move that will lead to reduction of lending rate by banks leading to lower EMI for housing, car loan and corporate borrowers.

This is Das' first monetary policy review after taking charge as the RBI Governor, replacing Urjit Patel.

The 6-member Monetary Policy Committee (MPC), headed by Patel, reduced repo rate or the short term rate at which central bank lends to banks, to 6.25 percent. Consequently, the reverse repo rate has also come down by a similar percentage point to 6 percent. The MPC voted 4:2 in favour of the rate cut, while the decision to change policy stance was unanimous.

The central bank also changed its monetary policy stance to 'neutral' from the earlier 'calibrated tightening', signalling further softening on its approach towards interest rates.

The RBI cut its estimates on headline inflation which cooled off to a 18-month low of 2.2 per cent in December for the next year, and expects the number to come at 2.8 per cent in March quarter, 3.2-3.4 per cent in first half of next fiscal and 3.9 per cent in third quarter of FY20.

Deputy Governor Viral Acharya and another MPC member, Chetan Ghate, voted for status quo in interest rates, while Das and three others voted for a cut in interest rates.

The RBI had maintained status quo on the key lending rate (repo) in its last three bi-monthly policy reviews after raising the rate twice by 25 basis points each in the fiscal.

Das, in his maiden monetary policy review, has moved away from the usual practice of announcement 2:30 pm. Earlier, when Urjit Patel took charge as the RBI Governor, he shifted from the usual practice of announcement at 11 am and presented the fourth bi-monthly (his maiden) monetary policy review at 2:30 pm after the MPC meeting.

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Modi govt may merge these three PSBs to create giant PSU lender

The government is weighing the possibility of the next phase of consolidation in the public sector banking space by amalgamating three lenders —Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and Punjab & Sind Bank (P&SB), sources told FE.

“An inter-ministerial group (called Alternative Mechanism) under Union minister Arun Jaitley will take a final call on this plan. The (merger) option is on the table but whether the government is going to bite the bullet ahead of polls and announce amalgamation or choose to wait is yet to be seen,” said one of the sources.

While the headquarters of PNB and Punjab & Sind Bank are in Delhi that of OBC is in Gurugram (Haryana).,

The amalgamation, if approved, will be a part of the government’s efforts to create a few but strong banks with much larger balance sheets to support the rising appetite for credit of the fast-growing economy and enable optimum utilisation of resources. Upon amalgamation, the merged entity will have a combined business of over Rs16.5 lakh crore, deposits of Rs9.6 lakh crore and advances of close to Rs7 lakh crore, said the sources.

It will pip Bank of Baroda (into which Vijaya Bank and Dena Bank have recently merged) to become the second biggest public sector bank.

The net NPA ratio of PNB and OBC stood at 8.22% and 7.15%, respectively, as of December quarter, having improved from 11.24% and 10.48% at the end of March 2018.

PNB surprised analysts by recording a 7% rise in net profit in the three months through December 2018 following losses in three previous quarters. The Reserve Bank of India (RBI) last week lifted various restrictions on OBC, which had been under the prompt corrective action (PCA) framework since October 2017. Although Punjab and Sind Bank has witnessed losses in the first two quarters of this fiscal, on top of the losses in the last fiscal, it hasn’t made into the central bank’s watch list and its net non-performing asset (NPA) ratio of 5.25% is relatively decent.

The successful experience of merging State Bank of India with five of its subsidiaries and Bharatiya Mahila Bank, and the amalgamation of Bank of Baroda, Vijaya Bank and Dena Bank have given the government confidence that another round of consolidation can be handled without hiccups. However, given that PNB, OBC and Punjab & Sind Bank, while witnessing an improvement in their finances are not out of the woods yet, the government may choose to wait until their recovery takes roots, said another source.

Presenting the Interim Budget 2019-20, finance minister Piyush Goyal said: “Amalgamation of banks has also been done to reap the benefits of economies of scale, improved access to capital and to cover a larger geographical spread.”

Source - The Financial Express

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Allahabad Bank narrows losses in Q3FY19

State-run Allahabad Bank on Wednesday announced a net loss of Rs 732.81 crore for the quarter ended December 31, 2018, narrowing the net loss of Rs 1,263.79 crore reported for year ago period.

The lender, which is under the prompt corrective action (PCA) of the Reserve Bank of India (RBI), had reported a net loss of Rs 1,822.71 crore for the second quarter of the current fiscal.

The city-headquartered lender posted an operating profit of Rs 768.97 crore, down by 16.6 per cent year-on-year from Rs 922.17 crore in the corresponding quarter of the last fiscal. But the same increased by 44 per cent quarter-on-quarter from Rs 533.97 crore.

Also read- Q3FY19 Results of all Public & Private Sector banks in India 

On a year-on-year basis, total income at Rs 4,756.88 crore during the period remained flat compared with Rs 4,755.33 crore in the year-ago quarter. It increased by nearly 8 per cent on the quarter-on-quarter basis from Rs 4,410.72 crore in the July-September period.

During the third quarter of FY19, gross non-performing assets (NPAs) increased on a quarter-on-quarter basis in absolute terms to Rs 28,218.79 crore from Rs 27,236.19 crore in the September quarter.

The net NPA was at Rs 10,865.26 crore in the third quarter , down from Rs 11,082.74 crore by the end of September quarter.

Gross NPA of the bank as a percentage of total loans was at 17.81 per cent by the end of December quarter against 17.53 per cent in the previous quarter. During the period under review, net NPA ratio at 7.70 per cent also decreased sequentially.

Provisions and contingencies were at Rs 1,495.34 crore, down substantially from Rs 2,413.46 crore in Q3FY18. At Rs 1,900 crore, provisions for NPAs decreased by 7 per cent year-on-year.

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IDBI Bank may be renamed by LIC

IDBI Bank could be renamed either LIC IDBI Bank or LIC Bank after the Life Insurance Corporation of India (LIC) bought a majority stake in it. But what remains to be understood is whether the new name will hold even after LIC eventually brings down its stake to 15 percent as per regulatory norms.

Insurance Regulatory and Development Authority of India (IRDAI) had in June 2018 made an exception when it allowed LIC to hold 51 percent in IDBI Bank. Insurance regulations state an insurer can hold only 15 percent equity stake in an entity to ensure there is no concentration of risks.

LIC had in In January 2019 completed the deal with IDBI bank. However, IRDAI Chairman Subhash Chandra Khuntia told reporters on the sidelines of an event last week that the approval for the LIC-IDBI Bank deal had been on the condition that the stake will eventually be brought down to 15 percent.

IDBI Bank board had on February 4 approved a proposal to change its name subject to a ‘no objection’ from Reserve Bank of India, shareholders as well as name availability by Ministry of Corporate Affairs.

While IRDAI has not specified by when LIC will have to bring down its stake in IDBI Bank, it is understood it will take at least four to five years. Whether it will be brought down gradually or at once is to be seen.

With IDBI Bank, this is LIC’s foray into the banking sector. Their idea will be to expand operations and engage in a full-fledged banking business. The mandate of reducing stake to 15 percent in the future could be a dampener in their plans.

Also, if the name has been changed after the majority stake purchase by LIC, once they reduce the stake will the name be changed again?

IDBI Bank and turnaround

LIC’s first mission is to help IDBI Bank manage its losses and also offer support to the bank against non-performing assets. IDBI Bank's third quarter loss widened sharply to Rs 4,185 crore, nearly a three-fold increase compared to a loss of Rs 1,524 crore posted a year-ago due to higher provisions.

Net interest income, the difference between interest earned and interest expended, fell by 18.5 percent year-on-year (YoY) to Rs 1,357 crore in the quarter ended December 2018 with 17 percent degrowth in loans.

However, their gross non-performing assets (NPA) as a percentage of total assets declined to 29.67 percent in Q3 against 31.78 percent in Q2FY19 and net NPA also dropped to 14.01 percent against 17.30 percent sequentially.

With LIC coming on board, the idea is to help IDBI Bank achieve a turnaround. At this stage, the 15 percent stake mandate will have to wait for at least 7-10 years. After that, it is not clear whether LIC would want to reduce its stake and exit banking operations or will it be granted an exception for a few more years.

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