Nine PSBs net Rs 11,251 cr losses

PSBs

The cumulative losses of nine public sector banks (PSBs) that were in the red for the third quarter have totaled Rs 11,251 crore – the highest ever in absolute terms. The latest to join the ranks is Bank of Baroda with a Rs 3,342 crore loss for the quarter ended December 15, this compared to a profit of Rs 334 crore for the corresponding period of the previous year.

Bank of Baroda is an exception to other public sector banks. The high losses are because the bank has decided to make all provisions towards bad loans in the third quarter instead of spreading it out between third and fourth quarter like other banks.

Other banks that have reported losses in excess of Rs 1,000 crore the third quarter are Bank of India, India Overseas Bank and IDBI Bank. Central Bank, Dena Bank, OBC and Allahabad Bank have reported losses of Rs 837 crore, Rs 663 crore, Rs 425 cr and Rs 486 cr. Rating agency CRISIL, in May 2015, had estimated bad loans in banks to rise to a high of Rs 5.3 lakh crore or 6.3% of total advances by March 2016. However, most nationalised banks have been reporting gross non-performing assets (bad loans) in the range of 8% to as high as 12%.

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