New Delhi: Three public sector banks, namely Central Bank of India , Allahabad Bank and Dena Bank , reported losses while Punjab National Bank posted a sharp decline in profit for the third quarter of 2015-16, due to sharp rise in bad loans.
The situation has raised concerns over the precarious state of the financial sector.
Central Bank of India reported a loss of Rs 836.62 crore for October-December 2015-16, against a profit of Rs 137.65 crore in the third quarter of the previous fiscal.
The asset quality worsened with the gross non-performing assets (NPAs) rising to 8.95 per cent of the gross advances during the quarter, as against 6.2 per cent year ago.
As a result, bank's provisions and contingencies more than doubled to Rs 1,499.05 crore as of December 2015, as against Rs 645.44 crore a year ago.
Similarly, Dena Bank reported a loss of Rs 662.85 crore for the third quarter as against net profit of Rs 76.56 crore in the same quarter last year.
Gross NPAs as a percentage to total advances rose significantly to 9.85 per cent from 5.61 per cent in the same quarter year ago, Dena Bank said in a statement.
Total provisions, excluding for income tax, rose four fold to Rs 966.97 crore as against Rs 241.33 crore in the year-ago period. Following the quarterly announcement, Dena Bank's scrip nosedived by over 12 per cent after the company reported dismal numbers.
The trends available from the December-end quarter results, announced on Tuesday, and ICICI Bank's performance pointed towards tough times for other lenders as well following the Reserve Bank of India's bad loan clean-up drive.
Analysts expect bank profitability to remain under stress for at least one more quarter as RBI has given lenders two quarters to provide adequately for loans that are under pressure.