Allahabad Bank on Wednesday reported a net profit of Rs 111.16 crore for the fourth quarter ended March 31, against a net loss of Rs 581.13 crore for the same period a year ago, because of lower provisions and higher treasury gain. The Kolkata-based bank’s asset quality worsened in the quarter under review as its gross non-performing assets (NPAs) in absolute term rose 34.5% year-on-year to Rs 20,687.83 crore from Rs 15,384.57 crore for the corresponding quarter of the previous fiscal.
Gross NPA as a percentage of total loans rose to 13.09% in the March quarter from 9.76% during the year-ago period. The bank’s net NPA ratio stood at 8.92%, compared with 6.76% for the same period last year. During the previous financial year, the lender narrowed its consolidated net loss to Rs 279 crore from Rs 719.84 crore in the previous financial year. But the worrying factor for the bank is along with reporting negative returns on assets for two consecutive years, its current net NPA ratio was more than 8% as on March 31, 2017.
Addressing a press meet after announcing the results, Ananthasubramanian said the bank would be looking at reducing bad loans and containing fresh addition to bad loans. It would be looking at reducing exposure to the corporate sector from 65% of its total loan book at present to 50% for risk mitigation. Asked whether the RBI can invoke the PCA against Allahabad Bank, Ananthasubramanian, who joined the bank earlier this month, said, “It is up to the RBI, we are on a wait and watch mode…no communication has been made so far. But it may invoke PCA.”
She said the bank would be very selective in corporate lending and the lending would depend on region, sector and credit rating, among others. During the March quarter, the state-run bank’s total income was at Rs 5,105 crore as against Rs 5,051.38 crore in the year-ago period. Provisions and contingencies decreased to Rs 1,430.16 crore from Rs 2,487.15 crore in the corresponding period of the previous financial year. Bajaj Finance Q4 net up 43%
Meanwhile, Pune-headquartered Bajaj Finance reported a 42.6% year-on-year (y-o-y) rise in its standalone net profit for the quarter ended March to Rs 449.15 crore on the back of a 39% y-o-y growth in total income from operations to Rs 2,665.02 crore. The company’s loan losses and provisions for Q4FY17, however, jumped 86% y-o-y to Rs 290 crore from Rs 156 crore. In a presentation to investors, Bajaj Finance said, “During the quarter, the company took an additional charge of Rs 70 crore on account of demonetisation and non-recurring provisions. Adjusted for this additional charge loan loss and provision has increased by 41%.”
Gross non-performing assets (NPAs) at the end of March stood at 1.68% of all assets, up from 1.47% at the end of December. Net NPAs stood at 0.44%, up five basis points from 0.39% at the end of December. The provision coverage ratio stood at 74%. The credit quality suffered the most in the two- and three-wheeler category. Assets under management stood at Rs 60,194 crore as on March 31, up 36% from Rs 44,229 crore as on March 31, 2016. Net interest income rose 49% to Rs 1,689 crore.
The company saw the strongest growth in the home finance category, with disbursal to the self-employed rising 167% y-o-y to Rs 655 crore during the quarter and those to salaried borrowers growing 131% to Rs 560 crore. The other category which saw significant growth was loans against property, where the company grew disbursal 92% y-o-y to Rs 904 crore. Bajaj Finserv consolidated net up 3% Bajaj Finserv, the holding company for the financial services business of the Bajaj Group, on Wednesday reported a 3% rise in its consolidated profit to Rs 535 crore for the quarter ended March.
The company’s general insurance arm, Bajaj Allianz General Insurance posted profit after tax at Rs 165 crore as against Rs 208 crore. S Sreenivasan, CFO, Bajaj Finserv, said the general insurance profit was down due to lesser profit on sale of investments and inclusion of tax credits pertaining to the previous year. This together accounted for around Rs 45 crore. But the underlying fundamentals of the general insurance business continued to be strong.