Bank of Baroda posted quarterly set of numbers that reinforced the story that has been been the running theme for banks this earnings season: that the asset quality picture is far worse than previously thought.
The bank posted a quarterly net loss of Rs 3342 crore, compared to Rs 124 crore quarter on quarter. The loss was driven by a 225 percent increase in provisions, which rose from Rs 1,891 crore in the previous quarter to Rs 6164 crore. A tax write-back of Rs 1,118.37 crore proved to be a big help in limiting the losses. Still, this is the biggest loss that any bank has posted this quarter.
Total income declined to Rs 11,726.95 crore in the quarter, from Rs 12,300 crore in the previous quarter. The bank's gross non-performing assets (GNPA) rose 64.2 percent QoQ to Rs 38,934 crore (9.68 percent) while net NPA rose 70 percent to Rs 21,806 crore.
Bank of Baroda's capital adequacy ratio under Basel III norms stood at 12.18 percent. "During the quarter, as a part of asset quality review (AQR) conducted by RBI, the bank has been advised to reclassify/make additional provisions in respect of certain advance accounts over two quarters ending December 2015 and March 2016.
The bank has accordingly implemented the RBI direction in this quarter," BoB said in its earnings statement. "Further, the bank has done an extensive review of the advance portfolio and has made additional provision for NPAs."
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