Bank of Baroda (BoB) said the Reserve Bank of India (RBI) has found that it has under-reported bad loans by Rs 5250 crore in the year ended 31 March 2019.
The divergence is the difference in bad loans reported by the bank and the assessment done by RBI. BoB had reported a net loss of Rs 8,339 crore in the year ended March 2019. The adjusted (notional) net loss for the year ended 31 March 2019, after taking into account the divergence in provisioning, was at Rs 10,998 crore.
According to recent guidelines by the Securities and Exchange Board of India (Sebi), banks are now required to disclose divergence in the asset classification and provisioning immediately upon receipt of RBI's final Risk Assessment Report (RAR).
For the year ended March 2019, the gross non-performing assets (NPAs) assessed by RBI was at Rs 75,174 crore compared with Rs 69,924 crore in gross NPA reported by the bank.
The bank had reported Rs 23,795 crore net NPAs during the year while the RBI assessed it at Rs 29,045 crore, leaving a gap of Rs 5,250 crore. The divergence in provisioning also increased by Rs 4,090 crore for the fiscal ended March 2019.
Bank of Baroda was down 1.32% at Rs 100.90. Meanwhile, the Nifty Bank index was trading 0.05% higher at 32,157.85.
On standalone basis, BoB registered 73.2% increase in net profit to Rs 736.68 crore in Q2 September 2019 from Rs 425.38 crore in Q2 September 2018.
The ratio of gross NPAs to gross advances stood at 10.25% as on 30 September 2019 as against 10.28% as on 30 June 2019 and 11.78% as on 30 September 2018. The ratio of net NPAs to net advances stood at 3.91% as on 30 September 2019 as against 3.95% as on 30 June 2019 and 4.86% as on 30 September 2018.
BoB is a public sector bank with 46 branches in 14 countries. The Government of India held 69.23% stake in the bank as on 30 September 2019.
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