Skeletons maintain to tumble out of the cupboards at country-owned banks, after an asset first-rateassessment performed with the aid of the Reserve financial institution of India (RBI) late ultimate yr. The overview introduced to light a mountain of stressed assets, which those lenders had no longerlabeled appropriately as non-appearing loans.
with the aid of maintaining such loans out of the non-acting category, banks had kept their provisions low and, therefore, their profits intact. this is not the case. As banks are compelled to reclassify those loans and make provisions against them, earnings were wiped out at some of large and mid-sized public zonebanks. On Wednesday, Punjab countrywide financial institution (PNB) stated a loss of Rs5,367 crore, the largest-ever loss pronounced by way of an Indian lender primarily based on facts due to the fact that1990 to be had with corporate database company Capitaline.
Mint looks at the biggest losses stated by way of Indian banks and the reasons in the back of thoselosses.
Punjab country wide financial institution: PNB’s surprising Rs5,367 crore loss comes towards the backdrop of a surge in bad loans. The lender has pronounced gross horrific loans of Rs55,818 crorecompared to Rs34,338 crore within the previous area. As a percent of its loan book, PNB’s terrible loansare actually at 12.nine%. To cowl for these awful loans, provisions were increased, which has brought about the financial institution reporting the worst loss in the records of the Indian banking area.
bank of Baroda (BoB): the second one and 0.33 largest losses were reported by using bank of Baroda in the December 2015 and March 2016 quarters. As the new control of the bank, led through leaderexecutive officer P.S. Jaykumar, has moved to clean the financial institution’s balancesheet. BoB hasreported two consecutive quarters of losses. in the December 2015 region, the financial institutionmentioned a loss of Rs3,342 crore which became followed via a lack of Rs3,230 crore in the March zone. The March sector losses were attributable to the bank’s choice to boom its provision coverage ratio tosafer tiers of 60%. The bank’s gross non-performing property (NPAs) have surged to 9.nine% as of thestop of March.
IDBI financial institution: inside the December 2015 zone, IDBI bank pronounced a loss of Rs2,183 crore. this is the fourth maximum loss mentioned via any bank. The financial institution is currently in the midst of looking to draw in external investors as a part of the authorities’s plan to restructure thebank. The financial institution is still to document its March zone profits. in the December region, IDBIbank had gross NPAs of eight.94% of its overall loan ebook.
Syndicate financial institution: On Tuesday, the lender pronounced a Rs2,158 crore loss. that is the 5thhighest loss reported by means of any financial institution. in the case of Syndicate bank, the losschanged into as a result of an awesome charge taken because of a fraud detected by way of the bank. The lender wrote off Rs.882.sixty four crore in the fourth quarter (the 3 months ended 31 March) because of fraud at its branches in Jaipur during the last four years.
