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Corporation Bank treats Kingfisher loan as NPA in Q3

BS Reporter  |  Mumbai 

Says it will also restructure its Rs 1,300-cr loan to Rajasthan state power company.

Corporation Bank has treated loans to ailing private carrier Kingfisher Airlines as a non-performing asset (NPA) in the third quarter ended December 2011.

Its loan exposure to Kingfisher was just a little more than Rs 155 crore. The bank made provision of around Rs 35 crore in the third quarter, said a senior bank official.

State Bank of India, Bank of India and Punjab National bank have also declared loans to the Vijay Mallya-promoted private airlines as an NPA, for the default on payment of dues.

The official said this airline is a commercially viable entity and come out of the crisis with the infusion of capital

Meanwhile, the bank has also said it would restructure its Rs 1,300-crore loan to Rajasthan State Power Distribution Company in the fourth quarter ended March 2012.

Its total exposure to state discoms is Rs 2,500 crore.

Central Bank of India, another public sector lender, also plans to restructure loans of Rs 7,000 crore to discoms in the fourth quarter.

Discoms have been ailing for quite a few years due to lack of rate increases, inability to deal with huge power thefts and state governments which have been very lax in paying the subsidies.

This has forced many discoms across the country to raise short-term loans. Increased interest costs because of loans also added to losses.

PERFORMANCE SHEET
  Net profit (Rs cr) Total income (Rs cr) Net interest margin (%) Gross NPA (%)
Q3 Fy12 402.22 3,804.50 2.66 1.35
Q3 Fy11 382.42 2,735.74 2.96 1.26

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First Published: Fri, February 03 2012. 00:28 IST
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