(Reuters) - Bank of India Ltd aims to return to profit in the January-March quarter as it focuses on reducing bad loans, its chief executive said on Monday, after the state-run lender logged its biggest quarterly loss since at least 2005.
A spike in bad loan provisions dragged the bank to a net loss https://www.bseindia.com/xml-data/corpfiling/AttachLive/7bff7c3b-4513-40a8-b6aa-872e69d6df82.pdf of 47.38 billion rupees ($666.50 million) in the three months ended Dec. 31. In the same period the year before, it registered a loss of 23.41 billion rupees.
"Going ahead, the main area of focus will be to reduce bad loans and get back to a profit in the Jan-March quarter," CEO Dinabandhu Mohapatra said at a post-earnings press conference, adding the bank expected 26 billion rupees to be recovered from bankruptcy cases in the current quarter.
Indian banks, especially those run by the state, have been dogged by surging levels of bad loans, forcing the central bank to undertake a clean-up exercise that includes sending defaulting borrowers into a bankruptcy court framework. Lenders have since had to make higher provisions for non-performing assets.
In the September-December quarter, provisions for bad loans at Bank of India more than doubled to 91.79 billion rupees. However, gross addition of bad loans slowed sharply to 43.15 billion rupees from 183.29 billion in the year-earlier period.
Gross bad loans as a percentage of total loans, a measure of asset quality, eased to 16.31 percent by the end of December, from 16.36 percent at the end of September and 16.93 percent a year earlier.
Mohapatra also said the bank had an exposure of 34 billion rupees to struggling infrastructure conglomerate IL&FS, and some non-fund exposure to debt-laden carrier Jet Airways Ltd.
More From This Section
($1 = 71.0875 Indian rupees)
(Reporting by Chris Thomas in Bengaluru and Suvashree Choudhury in Mumbai, Editing by Sherry Jacob-Phillips and Mark Pottter)