Even though the Reserve Bank of India (RBI) is under “enormous pressure” for not calling “stressed assets as non-performing assets”, three public sector banks have come out with a steep fall in net profits for the first quarter ended June 2015 following a sharp jump in bad loans.
Punjab National Bank, Union Bank and Bank of India have together reported NPAs of Rs 66,430 crore in the June quarter as against Rs 42,467 crore a year ago, a rise of 56 per cent.
The net profit of PNB, the country’s second largest public sector lender, nearly halved to Rs 721 crore, a 48.68 per cent decline from Rs 1,405 crore reported the same quarter of 2014-15 fiscal. PNB’s gross non-performing assets (NPAs) increased to Rs 25,397 crore in the June quarter of current fiscal as against Rs 19,603 crore in the same quarter of last fiscal.
The gross NPA of the bank as a percentage of total advances rose to 6.47 per cent in the June quarter from 5.48 per cent in the year ago period. Provisioning during the quarter rose to Rs 1,811 crore, from Rs 928 crore in the June quarter of last fiscal. PNB shares, however, rose by 4.95 per cent to Rs 142 as gross NPAs were stable on a quarter-on-quarter basis.
Union Bank of India on Tuesday reported a 22 per cent decline in net profit at Rs 518.78 crore for the first quarter ended June as against a net profit of Rs 664.11 crore in the April-June quarter of 2014-15 fiscal. Total income of the bank increased to Rs 9,043.17 crore during the first quarter from Rs 8,547.56 crore in the three month period of 2014-15 financial year.
Provisioning of bad loans increased to Rs 642 crore in the June quarter, from Rs 393 crore in the same period last fiscal. Gross non-performing assets (NPAs) as a percentage of total advances increased to 5.53 per cent during June quarter, from 4.27 per cent in the same period last fiscal. Gross NPA in value terms stood at Rs 14,144 crore during quarter, as against Rs 10,232 crore in year ago period.
Union Bank shares rose 1.95 per cent to Rs 157.15 on Tuesday.
BoI has reported a 84 per cent decline in net profit at Rs 129.72 crore in April-June quarter of current fiscal as against a net profit of Rs 805.69 crore in first quarter of 2014-15 fiscal. Provisioning during first quarter rose to Rs 1,515 crore, from Rs 893 crore in the same period last financial year, BoI said.
NPAs as a percentage of total loans spiked to 6.80 per cent during June quarter, from 3.28 per cent in the year-ago period.