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Dena Bank Q1 net loss narrows to Rs.132.6 crore

State-run Dena Bank today reported an improvement with the net loss reducing to Rs 132.65 crore in the quarter ended June 30, helped by decline in NPAs and better net interest margin.

The bank had reported a loss of Rs 279.35 crore in the same quarter last year."Our provisions on NPAs have come down which resulted in reduction in loss this quarter. Last year in the June quarter, our NPAs provisioning was Rs 598 crore which has come down to Rs 434.58 crore this year," chairman and managing director Ashwani Kumar told reporters here.

The bank's net interest margins improved to 2.44 per cent in the first quarter from 2.02 per cent on a decrease in cost of deposit and increase is yield on advances.

Cost of deposit came down by 92 basis points to 5.87 per cent from 6.79 per cent.The total deposits got reduced by 4.61 per cent by shedding bulk deposits, while the advances were down 7.78 per cent. The credit-deposit ratio stood at 70.07 per cent.

In the quarter under review, the PSU lender received interest on income tax refund to the tune to Rs 70.53 crore which helped the net interest income to improve, Kumar said.

Net interest income rose to Rs 675.07 crore from Rs 620.88 crore a year ago.Gross non-performing assets increased to 17.37 per cent from 11.88 per cent, while net NPAs stood at 11.22 per cent as against 7.65 per cent.

Fresh slippages stood at Rs 954 crore, of which Rs 466 crore were from large accounts with exposure over Rs 10 crore. Kumar said the bank has exposure to nine accounts out of the 12 accounts which the Reserve Bank has asked banks to refer to NCLT under the Insolvency and Bankruptcy Code.

The bank's total exposure to nine accounts is Rs 2,660 crore. It will have to make an additional provisioning of Rs 272 crore on these nine accounts. The bank is looking to raise Rs 500 crore through qualified institutional placement (QIP).

"We are in the process of appointing merchant bankers and in next 10 days we hope to appoint them. By September, we hope to do our QIP," Kumar said.
The bank may also seek Rs 1,000 crore capital from the government this year.

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