Canara Bank posts ₹4,860 cr loss in Q4
MUMBAI: State-owned Canara Bank on Friday reported a loss for the fourth quarter (Q4) on account of higher provisions to cover bad loans.
Canara Bank reported a net loss of ₹4,859.8 crore for the three months ended March 31, as compared to a net profit of ₹214 crore in the year-ago period. Nine analysts polled by Bloomberg had expected a net loss of ₹698 crore.
Lenders have reported a rise in provisions for non-performing loans as a fallout of the Reserve Bank of India’s (RBI’s) February 12 circular, whereby the regulator withdrew a host of restructuring schemes and set a 180-day timeline for resolving stressed loans.
Canara Bank said since the benefits available to loans under the restructuring scheme were revoked as per the revised RBI circular, the accounts were classified as non-performing assets (NPAs).
Provisions and contingencies in the March quarter rose 235% year-on-year to ₹9,075 crore. In the December quarter, provisions were ₹2,674 crore.
Gross bad loans increased to ₹47,468 crore as on March 31 from ₹40,312 crore in the preceding quarter and ₹34,202 crore a year ago.
As a percentage of total loans, gross NPAs stood at 11.84% from 9.63% a year ago. Canara Bank also reported divergence in the reporting of gross bad loans for FY17. It said gross NPAs reported as on 31 March 2017 were ₹3,248.5 crore lower than RBI’s assessment.
On Friday, Dena Bank, UCO Bank and Allahabad Bank also reported a cumulative loss of ₹6,869 crore for Q4. All three lenders are under RBI’s prompt corrective action.