19 of 21 PSBs report Rs 63k-crore loss

Despite the talks of recovery, the public sector banks (PSBs) in the country have witnessed their worst quarterly losses between January and March 2018.

Out of 21 PSBs, 19 have made losses, with many of the them exceeding thousands of crores. The cumulative loss clocked by the 19 PSBs in just three months of the last financial year amounts to a whopping Rs 63,020.6 crore, as per the banks' filings with BSE for the quarter.

The only two PSBs to make profits in the quarter include Bengaluru-based Vijaya Bank and Chennai-based Indian Bank. While Vijaya Bank reported net profit of Rs 207.31 crore in the fourth quarter, Indian bank’s net profit stood at Rs 132 crore.

The scam-hit Punjab National Bank (PNB) reported the worst losses in the quarter ended March 31, 2018, amounting to a whopping Rs 13,416.9 crore. The country's largest public sector lender State Bank of India (SBI) was the second highest loss making PSB in the fourth quarter of the last fiscal, with losses amounting to Rs 7,718.2 crore.

IDBI Bank is the third in the list with the quarterly losses amounting to Rs 5,662.8 crore. Bengaluru-based Canara Bank reported the fourth highest losses among PSBs in the quarter, amounting to Rs 4,859.8 crore.

Among others, while most of the banks clocked losses in the range of Rs 2,000 crore to Rs 3,000 crore, Bank of Baroda and Allahabad Bank clocked losses in excess of Rs 3,000 crore -- Rs 3,102.34 crore and Rs 3,509.63 crore, respectively.

On the annual basis as well, these 19 PSBs are in the red, with a collective loss amounting to Rs 87,356.7 crore, with PNB again leading the list with a loss worth Rs 12,282.8 crore.

Most of the banks put the onus of massive losses on the increased provisioning for the bad loans arising out of srtringent norms rolled out by RBI to handle bad loans.

PNB said that it made provisions and contingencies worth Rs 20,353.10 crore for the quarter ended March 2018.

SBI Chairman Rajnish Kumar had said that the industry had gone through a challenging phase and SBI was not an exception. "I can confidently say that while last year was the year of disappointment, this will be the year of hope and the next year will be the year of happiness," he said.

Banking industry insiders told DH that the prevailing slowdown in the economy also contributed to the losses. "The increased provisions are complemented by the lack of loan growth. There has been a hit on income as well," one of the Deputy Managing Directors of SBI said.

The official also said that the banks are keenly watching crude oil prices. It is feared that the Reserve Bank might go for a 50 basis points (bps) rate hike to tame in the inflation arising out of rising fuel prices, which might hamper the loan growth prospects of the banks.

For the full year, SBI had to incur provision loss of Rs 70,680 crore and it also provided in full for the mark-to-market losses of over Rs 6,000 crore. Due to amendment in the Gratuity Act in the last week of March, the bank had to take a provision hit of Rs 900 crore.