BoB net down on heavy provisions for bad loans, fraud

Union Bank of India profit up 77% at Rs 658 cr; PNB's increases 8% to Rs 621 cr

Three large public sector banks came with a mixed bag of results for the September quarter. A big negative surprise was from Bank of Baroda (BoB), with a 88.7 per cent drop in net profit at Rs 124.5 crore, on a huge provision for bad loans and fraud.

In contrast, Union Bank of India posted 77 per cent growth in net profit at Rs 658 crore. And, Delhi-based Punjab National Bank posted a moderate eight per cent rise in standalone net profit to Rs 621 crore.

It was BoB's first result under new managing director and chief executive P S Jayakumar. He took charge in October 2015. Its gross non-performing assets were 5.56 per cent (Rs 23,710 crore) of the total, as against 3.32 per cent (Rs 13,057 crore) in the same period of 2014. Its restructured loan book was Rs 22,930 crore.

Provisions and contingencies rose to Rs 1,891 crore in the quarter, from Rs 888 crore last year. This included a provision of Rs 93 crore for one account declared a fraud. The total exposure to this account is Rs 374.5 crore; the remaining provisioning will be done over three quarters. The provision coverage ratio (PCR) was 58.2 per cent.

Union Bank’s slippages came down slightly to Rs 1,931 crore, from Rs 1,968 crore in the same period of 2014-15. Gross NPAs were 6.1 per cent, up from 4.7 per cent on end-September. The PCR was 57.8 per cent.

PNB's gross NPAs were 6.36 per cent and PCR was 61.35 per cent.