Some public sector banks have reported higher provisioning in the quarter ended September 30, 2010 on account of non-performing assets.
In some cases, the provisioning has pulled down the banks' net profits.
In case of Union Bank of India
According to Mr M.V. Nair, Chairman and Managing Director, Union Bank of India
A report by Ambit Capital said, “Despite a high, above-70 per cent growth in net interest income, Union Bank delivered a disappointing bottomline with net profit at Rs 303 crore, less than half of what we expected, predominantly as a result of disproportionately high delinquencies during the quarter.” Speaking to reporters while announcing the bank's quarterly results, Mr Nair said, “NPAs may have peaked. We are expecting cash recovery of Rs 430 crore in the second half against Rs 283 crore in the first half and upgradation of NPAs of Rs 373 crore against Rs 203 crore.”
In case of Central Bank of India
“We are committed to aggressive provisioning because it is good to clean up the balance sheet,'' Mr Sridhar said.
Dena Bank, too, reported higher provisions for the just ended quarter, at Rs 73 crore (Rs 1 crore).
The incremental NPA slippages in the second quarter were to the tune of Rs 142 crore, of which majority was in the corporate loans segment.
According to Mr D.L. Rawal, Chairman and Managing Director, Dena Bank is trying to build provisions on account of NPAs and expects gross NPAs to come down to less than Rs 800 crore by the end of year. Currently, it is at Rs 625 crore.
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