Public sector Oriental Bank of Commerce on Tuesday said its net losses widened to Rs1,985.42 crore in the third quarter ended 31 December, mainly due to uptick in bad loans that required higher allocation as reserve money.
The bank’s net loss was at Rs130.01 crore in the same quarter of the previous fiscal. The bank put aside Rs2,340.21 crore as provisioning for non-performing assets for the quarter under review, substantially higher from Rs1,429.62 crore in same period of 2016-17, the bank said in a regulatory filing.
However, it was lower sequentially as compared to Rs3,146.92 crore provisioning in second quarter ended September this fiscal. The gross non-performing assets (NPAs) as a ratio of gross loans as on 31 December 2017 rose to 16.95%, up from 13.80% in the same period a year ago.
Value-wise, gross NPAs stood at Rs27,550.88 crore in October-December period of 2017-18, as against Rs20,492.18 crore in same quarter of 2016-17.Net NPAs, however, fell to 9.52% of the net loans by end of third quarter from 9.68% a year ago.
In absolute terms, net bad loans were at Rs14,195.07 crore from Rs13,688.09 crore. The bank said it was required to make additional provision for select accounts covered under the provisions of Insolvency and Bankruptcy Code, 2016. It reserved Rs868.41 crore as provisioning against those accounts over and above the norms and to be spread proportionately till 31 March 2018.
However, as against the required proportionate provision of Rs578.94 crore up to 31 December 2017, the bank had provided for the entire amount of said additional provision of Rs868.41 crore during the second quarter ended September 2017, it added.
Besides, under the resolution of stressed assets, the bank is required to make additional provision over and above the norms in respect of identified accounts for amount of Rs460.88 crore by March-end.
Oriental Bank of Commerce (OBC) said it will make the said provision during the quarter ending 31 March 2018. The provision coverage ratio of the bank stood at 62.09% as on 31 December 2017. Total income of the bank also fell to Rs4,699.06 crore in the third quarter of 2017-18, from Rs5,416.37 crore earnings in third quarter 2016-17.
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