NPA provisions dent bottom line of three public sector banks

PNB Q2 net down 11.5% at Rs 549 cr; Bank of Maharashtra, Dena Bank post losses

Don't want to miss the best from Business Standard?

The burden of setting aside huge amounts for bad loans has dented the bottom line of three public sector banks – Punjab National Bank, Dena Bank and Bank of Maharashtra -- for the second quarter ended September 2016.

Delhi-based PNB posted a 11.5 per cent drop in net profit at Rs 549 crore in Q2FY17, down from Rs 621 crore a year ago. Its net profit in Q1 of FY2017 was Rs 306 crore.

The bank's provisions for gross NPAs rose by 9.2 per cent to Rs 2,218 crore, up from Rs 2,031 crore.

The gross NPAs stood at Rs 56,466 crore (13.6 per cent) at end of September 2016. It controlled slippages in loans. Its GNPAs declined from June 2016 level of Rs 56,654 crore.

Pune-based Bank of Maharashtra posted a net loss of Rs 337.15 crore as against a profit of Rs 72.03 crore in July-September 2015. It had booked a net loss of Rs 397.4 crore in Q1 of Fy17.

The bank's provisions for NPAs rose to Rs 656 crore in Q2FY17 from Rs 431 crore a year ago. The gross NPA stood at Rs 14,433 crore (14.8 per cent) at end of Q2 Fy17, up from Rs 7,986 crore (7.98 per cent) a year ago.

P Marathe, managing director and chief executive of BOM said, "About Rs 7,000 crore of GNPAs are an exposure to consortium accounts. The slippages will be controlled in the coming months. We have to improve recoveries and upgradations."

Bank of Maharashtra's aapital adequacy ratio stood at 11.14 per cent, with a tier-I of 8.48 per cent at end of September 2016.

Mumbai-based Dena Bank posted a net loss of Rs 43.3 crore in second quarter ended September 2016 (Q2Fy17) on doubling of provisions for bad loans. It had posted a net profit of Rs 38.7 crore in July-September 2015 (Q2 Fy16).

Its net interest income for the reporting quarter rose by mere two per cent Rs 672 crore in reporting.
 
The provisions for the non-performing loans (NPAs) rose to Rs 554 crore from Rs 286 crore in Q2 Fy16.

 
Dena Bank's gross NPAs stood at Rs 10,824 crore (13.79 per cent) at end of September 2016, up from Rs 5,282 crore (6.84 per cent) a year ago.

Its capital adequacy ratio was 11.79 per cent with tier I of 8.63 per cent.