Best Considered Bank Also Exposed

Asset agony of bank trio-TheTelegraph

Calcutta, Feb. 5: Three public sector lenders today reported disappointing earnings, hit by a deterioration in their asset quality and slow credit growth. Shares of the trio plummeted on the bourses once the numbers were announced. Chennai-based Indian Overseas Bank (IOB) registered its second straight quarterly loss at Rs 516.03 crore during the third quarter ended December. Net profit in the corresponding quarter a year ago stood at Rs 75.07 crore. IOB made higher provisions against domestic and overseas advances and also decided to curtail fresh advances. IOB's gross non-performing assets (NPAs) swelled to Rs 14,501 crore during the quarter with the ratio of gross NPA to total advances at 8.12 per cent against 5.27 per cent in the corresponding quarter a year ago. Total provisions and contingencies increased to Rs 1,183.04 crore during the third quarter against Rs 811.24 crore in the same quarter a year ago. Total advances increased 2.55 per cent to Rs 1,78,532 crore during the quarter over the year-ago period. Two Calcutta-based banks - Uco and Allahabad Bank - also saw their net profits squeezed by sticky assets and slow credit offtake. While Uco Bank reported a 3.48 per cent dip in net profit at Rs 304 crore for the quarter ended December, Allahabad Bank's net profit was down 49.5 per cent to Rs 164.11 crore. Gross non-performing assets of Uco Bank as a percentage of total advances rose to 6.50 per cent from 5.20 per cent a year ago. The bank registered fresh slippages of Rs 2,757.53 crore during the quarter, of which 54.71 per cent were restructured assets. The worst offenders were food processing, steel, power and infrastructure companies. Gross advances grew 3.58 per cent to Rs 14,6515.32 crore at the end of the quarter over the year-ago period as the bank was selective in offering credit to the corporate sector. Provisions increased to Rs 907.54 crore from Rs 811.68 crore in the same quarter of the previous year. Allahabad Bank could not significantly lower its gross NPA ratio, which stood at 5.46 per cent against 5.47 per cent in the same quarter of the previous fiscal. The gross NPA ratio during the third quarter rose from 5.36 per cent in the second quarter. Total provisions and contingencies increased to Rs 4,312.08 crore from Rs 4,296.93 crore. The scrips of the Indian Overseas Bank, Uco and Allahabad Bank were down 9.94, 5.66 and 3.07 per cent, respectively, on the Bombay Stock Exchange. The bank stocks managed to pull the Sensex down by 0.11 per cent today to 28850.97.

Profit Of Oriental Bank Fall By 91 percent

Oriental Bank of Commerce Q3 net down 91.3% at Rs 19.56 crore-Businss Standard

The bank had posted net profit of Rs 224.3 crore for the October-December quarter of 2013-14   Public sector lender Oriental Bank of Commerce (OBC) today reported a 91.27% decline in net profit at Rs 19.56 crore for the third quarter ended December 31, 2014, dragged by higher provisions. The bank had posted net profit of Rs 224.3 crore for the October-December quarter of 2013-14, OBC said in a BSE filing. OBC's total income rose by 7.79% to Rs 5,458.79 crore during the October-December period from Rs 5,063.98 crore in the same period last year. During the quarter under review, the bank's provisioning other than tax and contingencies jumped by 57.75% to Rs 885.14 crore from Rs 561.1 crore in the same quarter of the previous fiscal. The bank's gross NPAs increased to 5.43% at the end of third quarter from 3.87% in the corresponding period in the previous year. Shares of Oriental Bank of Commerce were trading at Rs 292.70 apiece, down 6.49% from its previous close on the BSE. Union Bank slips on poor results-Hindu  Business Line 28.01.2015 January 27, 2015:    The stock of Union Bank of India slipped 7 per cent on Tuesday, after the company delivered disappointing results for the December quarter. The bank’s net profit fell by 13 per cent over last year, primarily driven by increase in employee cost and provisioning on bad loans.   The bank’s advances grew by a subdued 8.9 per cent during December, lower than the industry credit growth of 10 per cent during this period.   Credit growth Aside from a slower credit growth, rise in bad loans, which is now 5 per cent of loans, up from 4.69 per cent in the September quarter, also impacted the bank's earnings. With restructured assets, another 5 per cent of loans, the bank’s stressed assets have been weighing on the bank’s capital base.   Union Bank of India has a tier I capital of 7.3 per cent (6.5 per cent norm) as of December 2014, stretching it thin. The return on equity is an abysmal 6.6 per cent down from about 8.3 per cent in the previous year.   Net interest margin The bank’s net interest margin, which has been under pressure, is likely to face further stress as the bank lowered its base rate by 25 basis points after the RBI’s policy rate cut on Januay 15. The yield on loans is already down 10 basis points sequentially in the December quarter Read also Government Plan for Merger of Banks and Idea Of Low Interest Regime

Bad loans bite Bank of Baroda-LiveMint 02.02.2015

The bank reported an operating profit of 6.4% that comes on top of a 2.8% decline in a year ago, with the key worry being deterioration in asset-qualityThe 68% fall in Bank of Baroda’s December quarter profit appears the least of its problems. The bank reported an operating profit of 6.4%, though it must be noted that this comes on top of a 2.8% decline in the year-ago quarter. The key worry, of course, is the deteriorat

ion in asset-quality yardsticks

One, slippages or fresh addition to bad loans, were Rs.3,042 crore in the December quarter. That compares with Rs.1,758 crore in the September quarter and Rs.1,881 crore in the three months ended June.

What’s more worrying is the contribution to slippages from the loans already restructured—this amounted to Rs.1,008 crore, compared with Rs.1,199 crore in the first half of this financial year.

Two, incremental restructured loans are also on the rise. The bank recast Rs.1,598 crore of loans in the last quarter, compared with the Rs.1,175 crore and Rs.986 crore in the September and June quarters, respectively. This number is expected to worsen in the March quarter since regulatory forbearance on recast assets is ending.

Three, loans to industry have been the main culprits this financial year. Gross bad loans as a proportion of total advances worsened to 6.83% for large and medium industries at the end of December, compared with 5.05% nine months earlier. Similarly, the bad loan ratio for micro and small industries deteriorated to 7.11% from 4.93% at the end of March.

Four, overall impaired assets, i.e., gross bad loans and recast loans, make up close to 10% of advances. Looking at it another way, net bad loans and recast loans are 82.4% of Bank of Baroda’s net worth, a 5 percentage points increase from three months earlier.

Asset impairment is likely to continue over the next couple of quarters as well in sync with an economic recovery. Meanwhile, the tepid loan growth rate is also not helping. A better pace of loan growth will be needed to compensate for credit costs and other expenses. The bank’s provision coverage ratio has dipped to 62.37% from 65.39% at the end of September.

At the very least, loan growth numbers should perk up to revive investor confidence in the stock. Despite trading below expected book value this financial year, the stock has trailed the CNX PSU Bankex index since April.

 Below given are links of other banks pathetic position

http://importantbankingnews2.blogspot.in/2015/01/banks-achhe-din-are-et-to-come.html

http://importantbankingnews2.blogspot.in/2015/01/profit-of-oriental-bank-fall-by-91.html

http://importantbankingnews2.blogspot.in/2015/01/quarterly-result-union-bank.html