Higher provisioning hits Canara, IOB in Q4

MUMBAI: Continuing the trend of showing major losses and failing to announce anydividend for its investors, public sector lenders Canara Bank BSE -2.94 % and Indian Overseas Bank BSE -1.25 % ( IOB ) both declared major losses. Canara Bank reported losses of Rs 3,905 crore, while Indian Overseas Bank posted Rs 936-crore loss in the March quarter.

As a direct impact of RBI’s asset quality review which has exposed skeletons in banks’ loan books, provisions against bad loans rose five times for Canara Bank and doubled for Indian Overseas Bank.

“We have predated provisions of Rs 1,300 crore plus provisions for loans to FCI (Food Corporation of India) and Uday bonds which took a toll on our bottom line. We expect earnings to improve from this fiscal,” said Rakesh Sharma, managing director, Canara Bank.

Canara Bank deposits have almost remained constant at Rs 4.8 lakh crore, advances have gone down by Rs 10,000 crore to Rs 3.2 lakh crore from a year ago. After making a provision of Rs 6,331 crore in the fourth quarter, its gross NPAs stood at Rs 31,638 crore.

IOB’s total advances fell to Rs 1.6 lakh crore from Rs 1.7 lakh crore a year ago, total deposits have gone down to Rs 2.2 lakh crore from Rs 2.4 lakh crore a year ago.