Vijaya Bank Suffers Rs 16cr Net Loss

Vijaya Bank has suffered a net loss of Rs 15.90 crore for the year ended March 31, 1997, taking its accumulated losses to Rs 333 crore.

The bank board is meeting today to approve the balance sheet for fiscal 1996-97.

The bank had ended the year with an operating profit of Rs 19 crore on a total income of Rs 796 crore and an expenditure of Rs 777 crore, a senior bank official told Business Standard.

However, we closed the year with a net loss because of the Reserve Bank of India (RBI) and statutory auditors insistence that the Rs 34.86 crore excess depreciation provided for last year should not be written back to the profit-and-loss account, he said.

 

The auditors deducted the Rs 19crore operating profit from the excess depreciation to arrive at a Rs 15.90 crore net loss, he said.

The bank, which had shown a loss of Rs 251 crore earlier, had earned an operating profit of Rs 4.91 crore for the year ended March 1996.

K C Chaudhary, the new chairman and managing director of the bank, had told Business Standard recently that we will end the year with a very good operating profit which will be in double figures.

Asked for his reaction to the present situation, Chaudhary refused to comment saying, I am bound to take my board of directors into confidence first on the issue.

Vijaya Banks capital adequacy ratio has gone up to an acceptable 11.08 per cent after it wrote back the Rs 34.86 crore excess depreciation as part of the banks capital structure and the government ploughed in Rs 302 crore as capital, an official clarified.

Besides, the official said, the statutory auditors forced the bank to make full provision for certain assets which can never be treated as NPA. For example, he said, Vayudoot Corporations account, which was subjected to a five-year moratorium by the government, was also fully provided now. This, he said, was despite the fact that the government had given an undertaking to clear the outstandings once the moratorium period was over. Same was the case with ailing Nirlon group accounts. Yet, the auditors made the bank provide full provisions for these accounts, he added.

The recovery of the non-performing assets, which was the main thrust area of the bank in 1996-97, helped in improving the funds position. Through its aggressive and effective recovery measures and constant monitoring process, the bank has been successful in reducing its NPAs by about Rs 100 crore by March 1997.

During the year, the total deposits of the bank grew by 16 per cent from Rs 5,988 crore in March 1996 to Rs 6,815 crore in March 1997. The banks total advances stood at Rs 2,735 crore in March 1997. Its share of priority sector advances at 46 per cent was above the prescribed level of 40 per cent.