The performance of public sector bank majors such as Punjab National Bank, Union Bank of India, Bank of India and Syndicate Bank for the first quarter ended June, 2015 has disappointed stock market, investors and the analysts alike.
All these banks have reported lower profits as a result of higher provisioning and rise in non-performing assets (NPAs).
Other banks are set to release their Q1 report cards in the coming week.
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The net interest income of the bank stood at RS 2,913 crore, while non-interest income was at Rs.840 crore as on June 30, 2015.
Bank of India’s retail advances grew 20.69 per cent as the total domestic advances increased from Rs.2,62,874 crore in June 2014 to Rs 2,80,986 crore in June 2015.
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CASA deposits increased from Rs.1,05,589 crore in June 2014 to Rs.1,15,737 crore in June 2015, a year-on-year growth of 9.61 per cent.
Savings deposits increased from Rs.85,815 crore in June 2014 to Rs.96,361 crore in June 2015, an year-on-year growth of 12.29 per cent.
The Gross NPA ratio stood at 6.80 per cent in June 2015 against 5.39 per cent in March 2015. Net NPA ratio stood at 4.11 per cent in June 2015 against 3.36 per cent in March 2015. Provision Coverage Ratio stood at 52.15 per cent.
“Despite optimism, Indian economy is still not out of stress…five sectors, infrastructure, mining, power, iron and steel, continue to account for over 40 per cent of the total stressed assets,” said B. P. Sharma, Managing Director and CEO, Bank of India.
“This quarter, the recovery was not as expected,” Mr. Sharma added. He said that the focus now would be on recovery and merit-based restructuring and would be stringent on risky accounts. “Slippage will be there going forward but the rate of slippage will come down,” said Mr. Sharma.
Union Bank of India Union Bank of India reported a net profit of Rs.519 crore for the first quarter ended June 30, 2015 compared to Rs.664 crore a year ago.
Domestic Net Interest Margin (NIM) stood at 2.46 per cent for April-June 2015 compared to 2.68 per cent a year ago. Net Interest Income for April-June 2015 was at Rs.2,130 crore compared to Rs.2,117 crore in April-June 2014. Non Interest Income stood at Rs.783 crore, up 13 per cent over a year ago.
Gross NPAs stood at 5.53 per cent as on June 30, 2015 against 4.08 per cent as on June 30, 2014. Net NPA ratio is at 3.08 per cent as on June 30, 2015against 2.46 per cent as on June 30, 2014.
Punjab National Bank Punjab National Bank (PNB) posted a 48.7 per cent plunge in its first quarter net profit at Rs.721 crore, dragged down by higher bad loan provisioning and subdued credit growth.
The bank’s net profit for the June quarter a year ago stood at Rs.1,405 crore, it said in a statement.
The gross non-performing assets (NPAs) have increased to Rs.25,397 crore in the June quarter against Rs.19,603 crore in the same period last year, the statement said.
The gross NPAs of the bank as a percentage of total advances rose to 6.47 per cent during the April-June quarter, compared with 5.48 per cent in the year-ago period.
The bank’s provisioning during the June quarter rose to Rs.1,811 crore, from Rs.928 crore in the corresponding period last fiscal.
Interest income of the bank rose to Rs.12,035 crore during the first quarter, up nearly 4 per cent from Rs.11,589 crore in the corresponding three months period of 2014-15.
Total income of the bank rose to Rs.13,432 crore in the June quarter, from Rs.12,825 crore in the same period previous fiscal.
The bank also said that it had reported to the Reserve Bank 400 ‘wilful defaulters’, and plans to sell non-performing assets (NPAs) worth up to Rs.3,000 crore to Asset Reconstruction Companies (ARCs) in the current fiscal.
Syndicate Bank Syndicate Bank witnessed a 38 per cent dip in its net profit for the first quarter ended June 30, 2015 due to higher tax expense.
The bank’s net profit stood at Rs.301.98 crore in Q1 against Rs.485 crore during the same period last year. Total income stood at Rs.6,323.42 crore against Rs.5,523 crore, a growth of 14 per cent.
Tax expense was Rs.256.75 crore, a 323 per cent increase, against Rs.60.64 crore. Gross non-performing asset (NPA) ratio stood at 3.72 per cent in Q1 against 2.97 per cent last year, the company said in a filing to BSE. The net NPA (non-performing asset) ratio of the lender stood at 2.36 per cent against 1.88 per cent the year-ago period.
During the period under reference, the net interest income increased to Rs.1,412 crore from Rs.1,351 crore.
In the regulatory filing, the bank also said it had taken shareholders’ approval to raise equity capital up to Rs.2,000 crore to augment its capital base.