1. Results corner: Dena Bank posts net loss on 88.5% surge in provisions

Results corner: Dena Bank posts net loss on 88.5% surge in provisions

Public sector lender Dena Bank on Friday reported a net loss of Rs 326.4 crore for the March quarter, compared to a profit of Rs 55.8 crore in the same quarter last year, on the back of an 88.5% (Y-o-Y) surge in provisions to Rs 900.9 crore.

By: | Published: May 17, 2016 7:14 AM

Public sector lender Dena Bank on Friday reported a net loss of Rs 326.4 crore for the March quarter, compared to a profit of Rs 55.8 crore in the same quarter last year, on the back of an 88.5% (Y-o-Y) surge in provisions to Rs 900.9 crore.

The huge surge in provisioning was necessitated with gross non-performing assets (GNPAs) rising to 9.98% of advances.

A four basis points (Y-o-Y) decline in net interest income – the difference between interest earned and interest expended – and a 59.6% (Y-o-Y) rise in employee expense only to the woes of the Mumbai-headquartered bank.

This is the second successive quarter in which the bank has reported a net loss, which, in fact, would have been much worse if not for a tax write back of R340.9 crore.

While the bank’s treasury segment turned positive during the quarter — it had recorded a negative profit before tax in the same quarter last year — second successive quarter of losses in the corporate/wholesale and retail banking segments continued to put pressure on the

bottom line.

Speaking to the media, chairman & managing director Ashwani Kumar said the bank has initiated several measures to reduce NPAs and that it was his top priority. He also said one of the strategies of the bank was to increase non-interest income and reduce operating costs.

He guided for a 13% and 15% growth in deposits and advances, respectively, for FY17 and expects the bank’s net interest margin to be between 2.5% and 2.75% next year.

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