Bank of Baroda posts Rs3,230.14 crore loss in Q4 on higher provisions

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Mumbai: Bank of Baroda on Friday reported a net loss ofRs.3,230.14 crore for the March quarter due to higher provisions for bad loans. The loss was restricted due to a tax write-back of Rs.1,055.06 crore in the quarter.

This was the second consecutive quarter that the bank has reported a net loss. In the third quarter, the bank had reported a loss of Rs.3,342.04 crore. The lender reported a profit of Rs.598.35 crore in the March 2015 quarter. According to 25 Bloomberg analyst estimates, the bank was expected to post a net profit of Rs.229.30 crore.

Bad loans continued to rise as banks reclassified stressed assets.

Gross non-performing assets (NPAs) surged to Rs.40,521.04 crore at the end of the March quarter from Rs.16,261.45 crore a year ago. The bank reported gross NPAs of Rs.38,934.11 in the December-ended quarter.

Provisions and contingencies jumped to Rs.6,857.66 crore in the quarter from Rs.1,817.50 crore a year ago. For the December quarter the bank set aside Rs.6,164.55 crore as provisions against bad loans.

In December, the Reserve Bank of India (RBI) conducted an asset quality review across the banking sector, following which banks were asked to recognize visible stressed assets as non-performing assets (NPAs).

RBI also asked banks to make adequate provisions for these stressed assets.

As a percentage of total loans, gross NPAs stood at 9.99% at the end of the March quarter as compared with 9.68% in the previous quarter and 3.72% in the year ago quarter.

Net NPAs were at 5.06% as compared with 5.67% in the previous quarter and 1.89% in the same quarter last year.

Net interest income (NII), or the core income a bank earns by giving loans, rose marginally by 5% to Rs.3,330.41 crore from Rs.3,171.67 crore last year same quarter. Non-interest income rose 37% to Rs.1,774.68 crore from Rs.1,295.46 crore in the same period last year.

On Friday, Bank of Baroda closed at Rs.154.95 on the BSE, down 1.74% from the previous close, while the benchmark Sensex Index fell 1.2% to close at 25,489.57 points. The earnings were released after markets closed.