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In this article, we would discuss about the decline in net profits of public sector banks for Q1 that ended in June.
Percentage of non-performing assets (NPAs) heavily dented
public sector banks’ (PSBs) performance as of March 2015. For the first quarter
ended June, it has gone from bad to worse as net profits of some of the prominent
PSBs have dipped alarmingly.
Following are details on some of the PSBs that have reported a sharp decline in net profits as compared to last year
owing to less than expected recovery of loans, higher provisioning, high tax
expense, among other reasons.
Punjab National Bank
·
One of India’s Big Four, Punjab National Bank
has taken a bad hit in Q1 of the current fiscal with its net profit plummeting 48.7%;
to Rs.721 crore in 2015-16 from Rs.1405 crore in 2014-15.
·
The gross NPA of the bank increased to Rs.25,
397 crore in June quarter of this fiscal as against Rs.19, 603 crore in the year-ago
period.
·
As a percentage of the total advances, the GNPA
rose to 6.47% as against 5.48% in June quarter last year.
·
Resultantly, provisioning also rose to Rs.1811
crore as opposed to Rs.928 crore June 2014.
·
The bank has reported to the RBI of 400 ‘wilful
defaulters’, and plans to sell NPAs worth up to Rs.3, 000 crore to Asset
Reconstruction Companies (ARCs).
Union Bank of India
·
On August 4, Union Bank of India reported 22% drop
in its net profit, which stood at Rs.518.78 crore in the April-June quarter
this year as against Rs.664.11 crore in the corresponding period last fiscal.
·
GNPAs as a percentage of the total advances stood
at 5.53% as against last year’s 4.27%.
·
The gross NPA of the bank increased to Rs.14144 crore
in June quarter of this fiscal as against Rs.10232 crore in the year ago period.
·
Provisioning of bad loans rose to Rs.642 crore
in the current June quarter, from Rs.393 crore in the same period last fiscal.
Syndicate Bank
·
Syndicate Bank saw a 38% drop in its net profit
for this year’s first quarter ended June 30. Net profit of the bank stood at
Rs.301.98 crore as against Rs.485 crore in Q1 last year.
·
GNPA ratio stood at 3.72% as against 2.97 per
cent last year.
·
The gross NPA of the bank is Rs.7545.65 crore as
against Rs.5243.38 crore last year.
Bank of India
·
BoI’s net profits decreased 84% and stood at Rs.129.72
crore in Q1 this year as opposed to Rs.805.69 crore in Q1 last year.
·
GNPA of the bank increased from Rs.12532.49
crore last June to Rs.26889.17 crore this June quarter.
·
As a percentage of its total advances, GNPA is
6.80% as against 3.28% in the year-ago period.
·
Provisioning during first quarter rose to Rs.1,
515 crore, from Rs.893 crore in the same period in 2014-15.
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