Central Bank records loss of Rs 1,509 cr on high provisions

This is due to a quantum jump in provisions for non performing loan

Central Bank of India posted a net loss of Rs 1,509 crore for the quarter ended September 2013, owing to a huge rise in provisions for non-performing loans. In the corresponding period last year, it had recorded a net profit of Rs 330 crore.

Chairman and Managing Director Rajeev Rishi said the bank had made provisions and was doing intensive work on recoveries. The bank hoped to return to profits in the coming quarter, he added.

During the September quarter, total income rose to Rs 6,236 crore from Rs 5,680 crore in the year-ago period, while gross advances rose from Rs 1,53,601 crore to Rs 1,78,628 crore, a rise of 16.29 per cent. For 2013-14, credit growth was expected to moderate to 14.5 per cent, Rishi said. The bank’s gross non-performing assets rose to Rs 11,563 crore (6.47 per cent) from Rs 8,507 crore (5.54 per cent). Provisions and contingencies jumped from Rs 427 crore to Rs 2,050 crore and the majority of these were towards non-performing assets.

Standard restructured advances stood at Rs 25,598 crore.

The city-based public sector bank made huge provisions (about Rs 800 crore) towards the gems and jewellery segment (Winsome Diamonds and Forever). Earlier, it had made 15 per cent provision for exposure to this account.

The bank hope to improve asset quality, and some of the accounts would be upgraded to standard assets. In the short term, the bank has firmed up plans to arrest slippages and improve recoveries.

Total business (deposits and advances) increased to Rs 4,09,041 crore from Rs 3,57,139 crore in the September quarter of 2012. Total deposits grew 13.2 per cent to Rs 2, 30,413 crore, compared with Rs 2,03,538 crore in the year-ago period.

Under Basel-III norms, capital adequacy stood at 10.15 per cent, with tier-I capital adequacy at 6.52 per cent.