Bank of Maharashtra Q3 net loss widens 3-fold

State-owned Bank of Maharashtra on Tuesday reported over three-fold jump in net loss to Rs596.70 crore during the quarter ended December 2017 on spike in provisions due to higher non-performing assets (NPA) ratio.

The bank had posted a net loss of Rs182.51 crore in the corresponding quarter of the previous fiscal. The bank had incurred a net loss of Rs23.24 crore in the second quarter ended September 2017. The bank’s asset quality weakened, both annually and sequentially, with gross non-performing assets (NPAs) rising to 19.05% of the gross advances as on December 2017 against 15.08% by end of December 2016 and 18.54% by September 2017.

Net NPAs too rose to 12.17% of the net advances by end of the third quarter from 10.67% in same period a year ago. Thus, the provisioning for bad loans or NPAs was raised substantially to Rs1,343.62 crore during the third quarter of 2017-18, against Rs532.17 crore provision in the same quarter of 2016-17, the company said in a regulatory filing.

“As per RBI directions for initiating insolvency process provisioning norms in respect of 10 accounts (June 2017) and in respect of 10 other accounts (August 2017) covered under provisions of the Insolvency and Bankruptcy Code 2016, the bank is required to make additional provision of Rs 1,077.46 crore for NPAs and Rs 9.89 crore for standard advances by March 2018,” it said in the filing.

Of this, the bank has already made total provision of Rs651.18 crore for non-performing advances and Rs4.95 crore for standard advances till December 2017, it said. The total income of the bank too witnessed a beating with earnings falling to Rs2,994.55 crore in October-December period of this fiscal against Rs3,473.77 crore in the same quarter of 2016-17.

Bank of Maharashtra said it sold advances amounting to Rs61.08 crore (Rs10.22 crore during the quarter) to an asset reconstruction company at a loss of Rs5.53 crore on such sale during the nine months ended December, 2017.

Loans and advances of Rs194.09 crore were classified as fraud during the nine months from April to December and the entire amount is provided for, the bank said.