Bad loans: Bank of Baroda posts highest-ever loss of ` 3,342 crore
Bank of Baroda on Saturday joined the bandwagon of banks hit by mounting provisions for bad loans as the stateowned lender posted its highest ever loss in any quarter at Rs3,342 crore due to a nearly five-time jump in provisioning.
This is the highest loss suffered by any lender. The bank had reported a net profit of Rs332 crore in the year-ago period. In the October-December quarter, provisions against bad loans surged to Rs 6,474 crore as against Rs 1,150 last year. The bank made provisions for all weak assets identified under the Reserve Bank of India’s asset quality review.
“High provisions for stressed loans and reversal of part of interest income for accounts now treated as non-performing loans hit the bottom line,” the bank said in a statement. Having made the provisions in one go, Bank of Baroda now expects to report a profit in the fourth quarter ending March.
The bank’s loss came two days after State Bank of India (SBI), the country’s largest lender, reported a 62% drop in profits, again due to bad loans. Inability of companies to service their loans due to an overriding slowdown in the previous couple of years has affected most Indian banks with a majority of their loans turning bad.