Mumbai: Bank of Baroda – the country’s second largest lender – reported a Rs.3,342 crore loss during the Oct-Dec quarter, as compared to 334 crore profit during the same period last year as bad loans surged. This is the highest-ever quarter loss posted by an Indian lender.
Most lenders have reported weak earnings for the third quarter after the Reserve Bank of India directed them to classify many accounts as non-performing that were identified by the regulator during an Asset Quality Review (AQR).
Fresh slippages during the quarter was at Rs.15,603 crore as compared to Rs.3,042 crore during the same period of last year. This has resulted 463% increase in bad loan provisioning requirement to Rs.6,474 crore.
The gross non-performing asset of the bank increased 64 per cent to Rs.38,934 crore which was 9.68 per cent of total loans. The provision coverage ratio of the bank was at 52.7 per cent.
The bank has made treasury gains of Rs.530 crore during the quarter. “Our sense is that the worst is over,” said PS Jayakumar, managing director and chief executive officer of Bank of Baroda during the post earnings conference, while referring to the fact that the bank has made the entire provisioning as required by RBI in Q3.
Despite reporting heavy losses, Mr Jayakumar said it has enough capital to support its business growth for the next 18 to 24 months.
The capital adequacy ratio of the bank was 12.18 per cent, including 9.04 per cent of common equity Tier-I capital.