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Ahead of amalgamation with BoB; Dena Bank narrows Q3 loss on lower NPA provisions

Press Trust of India  |  New Delhi 

Ahead of its amalgamation with Bank of Baroda, Dena Bank Thursday said it has trimmed net losses to Rs 178.47 crore during third quarter ended December of this fiscal as bad loans provisions nearly halved.

The bank had posted a net loss of Rs 380 crore in the October-December period of 2017-18.

The bank also made cash recoveries of Rs 1,036.40 crore in non-performing assets (NPAs) during the quarter, higher from Rs 170.79 crore recovered during the same period of 2017-18.

During the nine months to December of the current fiscal 2018-19, total cash recoveries against NPAs were Rs 2,619.34 crore, the bank said in a release. It was Rs 661.85 crore during the April-December period of the previous financial year.

Total income of the bank was down to Rs 2,293 crore in the quarter under review as against Rs 2,476 crore in the year-ago period as the bank has been put under some restrictions by the Reserve Bank under the Prompt Corrective Action (PCA), Dena Bank Managing Director and CEO Karnam Sekar.

It improved the asset quality as the net non-performing assets (NPAs) came down to 10.44 per cent of total advances at December-end 2018 from 11.52 per cent in year-ago same period.

Gross NPAs, however, rose to 19.77 per cent of gross advances as against 19.56 per cent a year ago, as per the regulatory filing of the bank to the exchanges.

In absolute terms, net NPAs stood at Rs 6,142.47 crore by the end of third quarter 2018-19 as against Rs 7,564.20 crore a year ago.

Gross NPAs stood at Rs 12,998.46 crore, down from Rs 14,168.78 crore a year ago.

Speaking to PTI, Sekar said: "After the amalgamation of the Dena Bank (with Bank of Baroda along with Vijaya Bank), we thought we should focus on our NPAs. We thought that high level of gross NPA is the basic problem of dena bank, so we have decided that we should attack that."

He said the bank has given itself a mission called 'Mission Dena 9999 under with it wants to bring down its gross NPAs or bad loans to the high four digit number 9999 by March 2019.

Bank's gross bad loans were to the tune of Rs 16,140 crore at the end of second quarter in September 2018.

Dena Bank nearly halved the provisioning towards bad loans to Rs 519.37 crore in the latest quarter from Rs 1,044.28 crore in October-December 2017.

Provision coverage ratio stood at 66.60 per cent at December-end 2018.

The lender also informed that "the board of directors of Bank of Baroda, Vijaya Bank and Dena Bank at their respective meetings held on January 2, 2019, have approved the amalgamation of the three banks."


The state-owned lender said its up-gradations from NPA portfolio has increased to Rs 417.08 crore as against up gradations of Rs 98.83 crore in Q3FY18.

"Up-gradation during December 2018 (9M) is Rs 854.52 crore as compared to ' 551.31 crore during December 2017 (9M). Recovery in written-off accounts is Rs 112.63 crore for the quarter as against Rs 1.86 crore a year ago," the bank said.

Speaking about the amalgamation process under which Bank of Baroda, Dena Bank and Vijaya Bank will become a combined entity from next fiscal beginning April 1, Sekar said Dena has been very good with its CASA (current account/savings account).

"Despite all the issues of PCA and amalgamation announcement, our CASA percentage has never gone below 40 per cent. We have a very strong presence in Gujarat, Vijaya Bank has a very good presence in the south. So that way we all three banks are complimentary to each other," he said.

There will also be branch rationalisation also as part of the merger and the three entities are still in the process of doing that, he added.

The three state-owned lenders are also under discussion if the three banks will be known as Bank of Baroda or there will be new name reflecting the essence of each of them.

Also, there may be repositioning of the logo so that it reflects all the three banks, he said.

The deposits of the bank decreased by 3.96 per cent to Rs 1.01 lakh crore by end of December 2018 as against Rs 1.05 lakh crore by year ago same period.

Gross advances decreased by 9.26 per cent to Rs 65,734 crore by end December of this fiscal from Rs 72,443 crore a year ago same period.

Stock of the bank closed 1.19 per cent down at Rs 12.45 on BSE.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 31 2019. 21:20 IST
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