BoB bleeds as bad loan provision rises, posts a whopping Rs 31-bn loss

Asset quality of the bank worsened as gross NPAs surged to 12.26 per cent of gross advances as of March 31, 2018

State-owned Bank of Baroda (BoB) on Friday reported a net loss of Rs 31.02 billion for the January-March quarter of 2017-18 due to higher provisioning for mounting bad loans.

The lender had registered a net profit of Rs 1.5 billion in the corresponding quarter of 2016-17.

Provisions for bad loans jumped to Rs 70.52 billion in the March quarter from Rs 24.25 billion in the same period of 2016-17, according to a regulatory filing by the bank.

For the year 2017-18, net loss was Rs 24.32 billion compared to net profit of Rs 13.83 billion in FY17.

Asset quality of the bank worsened as gross non-performing assets (NPAs) or bad loans surged to 12.26 per cent of gross advances as on March 31, 2018, against 10.46 per cent as on March 31, 2017. 

In absolute value, gross NPAs were Rs 564.80 billion, up from Rs 427.18 billion a year ago.

BoB also reported divergence in asset classification (NPAs) to the tune of Rs 29.18 billion in the financial year 2016-17. The gross NPAs assessed by the Reserve Bank of India stood at Rs 456.37 billion against the bank's assessment of Rs 427.18 billion.

Net NPAs were at 5.49 per cent (Rs 234.82 billion) as of March 2018 against 4.72 per cent (Rs 180.80 billion) a year ago.

The bank’s board of directors did not declare any dividend for 2017-18 at the meeting held on Friday.

Moreover, the board approved raising additional funds to the tune of Rs 100 billion until March 2019 and more, if needed. 

Shares of the bank closed 1.80 per cent up at Rs 141.20 on the BSE.