Lakshmi Vilas Bank Q3 net down 76 pct to Rs 7.42 cr on higher provisioning

Feb 15 2014, 05:52 IST
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SummaryNet interest income of the bank stood at Rs 125.32 crore...

Lakshmi Vilas Bank (LVB) reported a steep fall of 76.25% in net profit y-o-y to Rs 7.42 crore on Friday due to higher provisioning for bad loans.

Net interest income of the bank stood at Rs 125.32 crore, up 16.99% y-o-y. Asset quality deteriorated sharply and gross non-performing assets (NPAs) increased to Rs 722.20 crore, a jump of 48.29% y-o-y. Net NPAs stood at Rs 550.22 crore, up 70.62% y-o-y.

As a ratio, gross NPAs stood at 5.60% of gross advances, up 38 bps from the September quarter and net NPAs stood at 4.33% of net advances, up 56 bps from the second quarter.

Provisions increased to Rs 67.67 crore from Rs 20.33 crore a year ago. As a result, the bankís capital-adequacy ratio fell 56 bps to 10.46% from the preceding quarter. Earlier in the month, ratings agency Brickwork Ratings downgraded the bankís long-term and Tier-II bond programmes to BBB+ with a negative outlook.

Small private and public sector banks have been reporting huge drops in profit due to rising provisions made for non-performing assets and, hence, eroding their capital-adequacy ratios. Recently, United Bank of India reported a loss of R1,238 crore in Q3 due to provisions for bad loans. United Bank of Indiaís Tier-1 CAR stood at 5.59%, much lower than the minimum 7% under the Basel-III norms. Similarly, Dhanlaxmi Bank reported a loss of R119 crore in the third quarter and its gross NPAs hit an all-time high of 7.05% of the loan book.

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