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Bad Loans Push Four Public Sector Banks To Combined Rs 11,729 Crore Q4 Loss

Allahabad Bank reported a net loss of Rs 3,510 crore and UCO Bank a Rs 2,134 crore loss.

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Bad Loans Push Four Public Sector Banks To Combined Rs 11,729 Crore Q4 Loss

Canara Bank's gross NPAs as a percentage of total loans rose to 11.84% at the end of March.

Bengaluru/Mumbai: Four Indian state banks reported on Friday a combined net loss of Rs 11,729 crore ($1.74 billion) for the fiscal fourth quarter due to a jump in bad-loan provisions following a tightening of central bank rules.

Bengaluru-headquartered Canara Bank Ltd, the biggest of the four, said its net loss was Rs 4,860 crore for the three months to March 31, compared with a net profit of Rs 214 crore a year earlier.

Allahabad Bank reported a net loss of Rs 3,510 crore and UCO Bank a Rs 2,134 crore loss. Dena Bank, the smallest of the four, made a net loss of Rs 1,225 crore.

Indian banks, already burdened by a near-record Rs 9.5 lakh crore of soured loans as of last year, were expected to report a further rise in bad loans in the March quarter after the central bank withdrew half a dozen loan-restructuring schemes and tightened some rules in February.

New Delhi owns majority stakes in 21 lenders that account for the bulk of the sector's bad loans, forcing the government to announce a $32 billion bailout package to help the lenders set aside funds for the soured loans and kickstart new lending.

Canara Bank's gross non-performing loans as a percentage of total loans rose to 11.84 per cent at the end of March, compared with 10.38 per cent in the preceding quarter and 9.63 per cent a year earlier. Provisions for non-performing assets almost tripled from a year earlier to Rs 8,763 crore.

Allahabad, UCO and Dena also saw their bad loans and provisions for bad loans rise sharply in the quarter.

Union Bank of India, also state-run, reported on Thursday a Rs 2,583 crore net loss for the fourth quarter.

Top state lenders State Bank of India, Punjab National Bank, Bank of Baroda and Bank of India are due to report fourth quarter results in the coming days.
© Thomson Reuters 2018


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