BANK OF BARODA POSTS ₹1,407 CR NET LOSS IN DEC QUARTER

MUMBAI: Public sector lender Bank of Baroda (BOB) on Friday reported a net loss of ₹1,407 crore for the three months to December, owing to higher provisions for bad assets.

The bank’s loss came as a surprise to the market as a Bloomberg poll of 18 analysts had predicted a profit of ₹683.4 crore.

On April 1, 2019, Bank of Baroda merged itself with two other state-owned banks, Dena Bank and Vijaya Bank. The bank provided comparable numbers for FY19’S December quarter by adding up the individuals numbers for the three banks. The profit for the amalgamated entity stood at ₹436 crore in Q3 FY20.

Bob’s provisions rose 54% on a year-on-year (y-o-y) basis to ₹6,365 crore. Its gross bad loan ratio, or total bad loans as a percentage of total advances, fell 48 basis points (bps) to 10.43% y-o-y. Its asset quality pressures continued in the December quarter, with loans worth Rs 10,387 crore turning bad. Of this, ₹4,509 crore was owing to RBI’S divergence report that found under-reporting of bad loans. “We have had a bit of a rough quarter because of the impact of the divergence, which was there on the provision and on the profit, but if you look at the yoy figure they seem to stand out well,” said Sanjiv Chadha, chief executive, BOB.

According to S.L. Jain, executive director, BOB, most of the fresh slippages originated in sectors such as chemicals, power and non-banks. While slippages from a loan in the chemical sector was about ₹2,700 crore, two power accounts and three nonbanks contributed to slippages of ₹1,000 crore and ₹2,900 crore, respectively.