Allahabad Bank on Tuesday reported an over two-fold jump in standalone net loss to Rs1,986.26 crore for the fiscal third quarter ended 31 December 2019, mainly due to rising bad loans and higher provisioning.
The state-owned lender had reported a net loss of Rs733 crore for the corresponding October-December period of the previous fiscal.
Total income (standalone) during the quarter grew to Rs4,860.35 crore from Rs4,756.88 crore in the comparable period of 2018-19.
The bank's gross non-performing assets (NPAs) rose to 18.93 per cent of the gross advances by the end of the December quarter as against 17.81 per cent during the year ago quarter.
In value terms, NPAs or bad loans rose to Rs32,149.92 crore from Rs28,218.79 crore a year ago.
On a sequential basis, however, the bank’s NPAs were down from 19.05 per cent at the end of September 2019.
Net NPAs were down at 5.13 per cent (Rs7,449.27 crore) from 7.70 per cent (Rs10.865.26 crore), Allahabad Bank said.
Provisions for bad loans for the quarter increased to Rs3,003 crore from Rs1,900 crore a year ago, it said.
"The bank is carrying additional provision of ?1,801.26 crore over and above the provisions required to be made in terms of prudential norms issued by RBI, to ensure compliance with the PCA norms of net NPAs," the bank said.
On a consolidated basis, the bank’s losses widened to Rs1,980.82 crore for the quarter from Rs746.83 crore in the year ago period. Income was higher at Rs5,009.57 crore as against Rs4,896.75 crore.
As a relief to MSME borrowers registered under GST, the Kolkata-headquartered lender said as many as 667 such accounts were restructured for an outstanding amount of Rs348.13 crore.
For the accounts covered under the Insolvency and Bankruptcy Code (IBC), the bank has made a provision of Rs6,292.47 crore (100 per cent of total outstanding as of 31 December 019).
Non-performing loan coverage ratio of the bank stood at 82.42 per cent as of 31 December 2019, it said.
The bank has reported gross and net NPA divergence of Rs67 crore each for the last fiscal, as adjusted after the calculation done by the bank and assessment of the RBI.
The divergence in provisioning was Rs453 crore for 2018-19, which included Rs193 crore towards provisioning for standard assets and additional provisioning of Rs260 crore for NPAs, which had been duly accounted for in current fiscal and would require incremental provision of only Rs75.34 crore in Q3 FY20, it added.
"Divergence in NPAs as on March '19 will not impact the gross NPAs and net NPAs during Q3 FY20 as the accounts underlying had already been marked as NPA and provided suitably in Q1FY20 itself," Allahabad Bank said.
The Alternate Mechanism, as advised by the finance ministry, has accorded in-principle approval to the proposed amalgamation of Allahabad Bank with Indian Bank.
"Up to nine month ended December 31, 2019; 390 operational fraud cases were reported involving a total amount of ?86.26 crore. Out of these accounts, the bank has recovered a total amount of ?19.22 crore. No provision is written back during the current quarter," it said further.
The Prompt Corrective Action (PCA) norms are triggered if a bank's net NPA crosses 6 per cent or if CRAR (capital to risk weighted assets ratio) is below the regulatory requirement of 10.88 per cent as of March 2019.
In FY19, RBI removed Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, Allahabad Bank and Corporation Bank from the PCA framework in two phases after capital support from the government that resulted in improvement in their financial parameters.