Six public sector banks have reported fourth quarter losses of nearly £700 million, proving that bad loan problem still looms over the banks. Bank of Baroda reported the biggest loss with £323 million. With a profit of £9.7 million in the quarter, Union Bank of India was the only PSU bank to avoid a loss in the results announced last week. Other lenders, including Central Bank, UCO Bank, Allahabad Bank and Dena Bank reported losses.
The higher than-expected inflation numbers dashed hopes of any further rate cut by the RBI and the worse-than-expected results dragged down share prices even further. BoB's results were a surprise as the management had made huge provisions in the third quarter of the last fiscal, stating that it has set aside the full amount required in respect of accounts identified by the RBI as non-performing assets. The bank said that its gross non-performing assets rose to 9.99 per cent to its total loans.
Kolkata-based UCO Bank reported a fourth loss of £171.5 million. The bank had reported a net profit of £20.9 million in the year-ago quarter. The bank's gross NPAs rose to 15.43 per cent in March from 10.98 per cent at the end of the third quarter following £120.8 million of provisions, took a fresh hit of provisions amounting to £248.7 million in the fourth quarter. Union Bank was the only one to report a 22 per cent increase in net profit for the fourth quarter. Even though the bank reported an increase in NPA provisions and in the stock for bad loans, the bank's operating profits declined lower than expected.
