Npa Proviso, Vrs Drag Dena Bank Into The Red

Fresh provisioning of about Rs 500 crore for non-performing assets (NPAs) and voluntary retirement expenses of around Rs 50 crore has resulted in Dena Bank posting a net loss of Rs 266.12 crore in the year ended March 31, 2001 against a net profit of Rs 62.87 crore earned in the previous year.

The bank's capital adequacy ratio (CAR) has dipped to 7.73 per cent against the Reserve Bank of India-stipulated 9 per cent level.

The NPA portfolio of the bank stands at Rs 1,900 crore at end of fiscal 2000-01. A provision of Rs 334.20 crore has been made as against Rs 155.69 crore in the previous fiscal.

 

"Economic slowdown has affected the prospects of our borrowers, hence of the bank. Pre-VRS, the CAR is 9.60 per cent compared to the 9 per cent requirement," A G Joshi, chairman and managing director said.

"Under the circumstances, the bank has recorded an operating profit of Rs 175 crore against the internal target of Rs 181 crore set for the year," Joshi said. He said that Dena Bank's first quarter (April to June 2001) financial results will show significant improvement.

Total income of the bank in fiscal 2000-01 stood at Rs 1,915.46 crore (Rs 1,810.52 crore in the previous year). Interest earned was Rs 1,716.3 crore (Rs 1,587.3 crore) and other income was Rs 199 crore (Rs 211.7 crore).

Dena Bank's total expenditure has risen to Rs 2,427.2 crore (Rs 1,736.2 crore). Interest expended increased to Rs 1,267.4 crore (Rs 1,169.20 crore) and operating expenses rose to Rs 579.9 crore (Rs 411 crore). The bank will be amortising the Rs 240 crore outgo on account of the golden handshake scheme over five years.