IDBI Bank posts sector's largest quarterly loss

Canara Bank, Andhra Bank report slide in net profit during Oct-Dec 2015

Burdened with huge provisions for bad loans, three public-sector lenders — Canara Bank, IDBI Bank and Andhra Bank — reported dismal performance for the third quarter ended December 2015.

Mumbai-based IDBI Bank reported the largest ever loss in the Indian banking sector at Rs 2,183 crore in the quarter under review against a net profit of Rs 327 crore in the December 2014 quarter.

IDBI Bank’s provisions for non-performing assets (NPAs) and write-offs grew to Rs 2,503 crore from Rs 698 crore.

A steep rise in gross NPAs as well as provisions is the consequence of the banking regulator’s fiat to recognise stressed loans and make provisions for them.

IDBI Bank’s managing director and chief executive officer K Kharat said although the bank booked losses in the third quarter of FY16 owing to provisions, business parameters such as net interest income, net interest margin, and share of low-cost deposits have shown improvement.

Its gross NPAs grew to 8.94 per cent from 5.94 per cent a year ago. The provision coverage ratio was 62.92 per cent. The IDBI Bank stock closed flat at Rs 52.1 a share on the BSE on Friday.

Bengaluru-based Canara Bank posted a 87 per cent drop in net profit at Rs 84.9 crore for the third quarter of 2015-16 against a net profit of Rs 655.9 crore in the same quarter a year ago.

Gross NPAs as a percentage of total advances rose to 5.84 per cent from 3.35 per cent in the same quarter a year ago.

Canara Bank’s provisions for NPAs jumped to Rs 1,432 crore from Rs 952 crore in the third quarter of FY15. The provision coverage ratio was 53.96 per cent. The bank’s capital adequacy ratio was 11.54 per cent in December 2015. Its stock closed flat at Rs 172.95 a share on the BSE on Friday.

Hyderabad-based Andhra Bank’s net profit for the quarter under review declined 83 per cent to Rs 34.46 crore from Rs 202 crore in October-December 2014. Provisions for bad loans were at Rs 905.6 crore, up from Rs 541.5 crore kept aside in the same quarter in the previous financial year. The provision coverage ratio was 57.88 per cent at the end of December 2015.

Andhra Bank’s gross NPA stood at seven per cent against 5.99 per cent a year ago. The capital adequacy under Basel-III was 10.92 per cent at the end of December 2015. The bank’s share closed three per cent lower at Rs 43.45 a share on BSE on Friday.