CBI Q1 net loss widens to Rs 15.22 bn on 2-fold rise in bad loan provisions

Income of the Central Bank of India fell to Rs 59.04 billion in first quarter of 2018-19 from Rs 68.70 billion in the same period of 2017-18 as core income dropped

State-owned Central Bank of India's net loss widened by 74 per cent to Rs 15.22 billion (Rs 1,522.54 crore) in the quarter ending June due to a more than two-fold spike in provisions for bad loans.

The bank had registered a net loss of Rs 5.76 billion (Rs 576.76 crore) in the April-June quarter of 2017-18, according to a regulatory filing by the bank.

In preceding quarter ending March 2018, the bank had reported a net loss of Rs 21.13 billion (Rs 2,113.51 crore).

Income of the bank fell to Rs 59.04 billion (Rs 5,904.82 crore) in the first quarter of 2018-19 from Rs 68.70 billion (Rs 6,870.78 crore) in the same period of 2017-18 as core income dropped.

The bank earned an interest income of Rs 56.91 billion (Rs 5,691.87 crore) during the quarter through June, a fall of 8.4 per cent from Rs 62.10 billion (Rs 6,210.91 crore) in the year-ago quarter.

Gross non-performing assets (NPAs) jumped to 22.17 per cent of gross advances by the end of June from 18.23 per cent as on June 30, 2017. In value terms, gross NPAs or bad loans stood at Rs 387.78 billion (Rs 38,777.66 crore) as against Rs 313.98 billion (Rs 31,398.47 crore).
 

Net NPAs, however, fell to 10.58 per cent [ Rs 160.86 billion (Rs 16,086.25 crore)] by the end of June quarter, from 11.4 per cent [ Rs 174.07 billion (Rs 17,407.43 crore)] year earlier same period.

The provisioning for bad loans were raised by over two-times to Rs 25.38 billion (Rs 2,538.14 crore) at June-end this year from Rs 10.28 billion (Rs 1,028.93 crore) set aside for the same period of 2017-18.

Overall provisions and contingencies too increased to Rs 27.68 billion (Rs 2,768.22 crore) against Rs 12.69 billion (Rs 1,269.02 crore).

The return on assets further worsened at (-) 1.85 per cent from (-)0.71 per cent year ago. However, it improved from (-)2.75 per cent in March quarter.

Central Bank of India said for the accounts covered under the provisions of Insolvency and Bankruptcy Code, it is holding an additional provision of Rs 6.90 billion (Rs 690.20 crore) as on June 30, 2018, in respect of 21 borrower accounts.

"During the quarter, the bank has appropriated the amount recovered in accordance with the resolution plan approved vide order National Company Law Tribunal (NCLT). The Bank has appropriated an amount of Rs 762.9 million (Rs 76.29 crore) recovered in one of the cases, where appeal is pending before the National Company Law Appellate Tribunal (NCLAT)," it said.

Provisioning coverage ratio stood at 66.42 per cent as on June 30, 2018 against 54.48 per cent year ago.

Shares of the bank closed 1.26 per cent higher at Rs 72.20 on BSE today.