Bank of India shares hit after jump in Q4 bad loans

MUMBAI (Reuters) - Bank of India , the country's third-biggest state-run lender, reported an unexpected 561 million rupee ($8.8 million) loss for the fourth quarter, hit by a jump in bad loans that sent its shares down almost 8 percent.

The loss in the three months to the end of March compares to a 5.58 billion rupee profit a year earlier and to an analyst forecast of 5.22 billion, according to Thomson Reuters data.

Gross bad loans jumped to 5.39 percent from 4.07 percent in the third quarter and 3.15 percent in the same three months a year ago. Provisions roughly doubled from a year ago to 22.6 billion rupees.

 

The stock closed 5.9 percent down to 191.85 rupees.

India's banking sector has seen a surge in bad loans over the past two years, a jump blamed on a slowdown in the economy and lax due diligence across the industry.

India's largest bank, State Bank of India, last week posted better-than-expected quarterly bad debts and said it now expected an improvement -- a long-awaited sign of easing pressure. The increase in Bank of India's bad debts, however, shows the recovery may be slow and uneven.

(Reporting by Clara Ferreira Marques and Himank Sharma)