The capital-stressed LVB had hit the headlines recently when reports of some foreign funds evincing interest in the bank to pump in funds as strategic investors broke out.
Lakshmi Vilas Bank (LVB) on Friday reported a net loss of Rs 334.47 crore for the third quarter of FY20, compared with a net loss of Rs 373.48 crore in the corresponding quarter of last fiscal, reducing the loss by 39%. Total income fell 23.17% to Rs 585.76 crore, against Rs 762.47crore, LVB said in a regulatory filing to the stock exchanges.
Showing further cracks in its asset quality, the bank reported a jump in its gross NPA to 23.27% from 13.95%. Likewise, net NPA increased to 9.81% from 7.64% while the provision coverage ratio stood at 68.70%. The bank could bring down the loss in Q3 due to lower provisioning — it had provisioned Rs 315 crore towards NPAs in Q3 as compared to Rs431 crore in the year-ago period.
The capital-stressed LVB had hit the headlines recently when reports of some foreign funds evincing interest in the bank to pump in funds as strategic investors broke out. Responding to some reports, LVB earlier clarified that Tilden Park Capital Management, a US-based entity had requested for certain regulatory clarifications pertaining to investment in bank’s shares and the bank facilitated a meeting directly with the Reserve Bank of India.
The board of directors in the meeting held on Friday authorised the MD and CEO of the bank and KR Pradeep, a promoter head & non-executive director, along with a team, to hold talks with potential investors. The authority has been provided to save time on discussions and to expedite the capital-raising exercise, LVB said in the filing.
The bank had been put under the Prompt Corrective Action framework by the RBI in September 2019 due to severe financial problems including capital inadequacy and asset quality deterioration.
Certain actions have been prescribed, such as bringing in additional capital, restricting further lending to corporates, reducing NPAs and improving the provision coverage ratio to 70%.