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Rising bad loans have taken a toll on profitability of lenders, with several banks including BoB, Dena Bank, OBC and Kotak Mahindra Bank reporting a drop in net profit for the quarter ended June 2015.
Of the six banks that posted their quarterly numbers today, only State Bank of Mysore saw a slight jump in net profit.
Earlier this week, PSBs such as Punjab National Bank, Union Bank of India and Syndicate Bank had reported lower net profits due to a surge in bad loans.
Private lender Kotak Mahindra Bank, which merged ING Vysya Bank with itself effective April 1, reported a 25.8 per cent decline in net profit at Rs 516.57 crore for the quarter under review.
The gross NPAs as a percentage of total advances rose to 2.04 per cent, from 1.56 per cent in the year-ago period. The net NPAs too increased to 0.93 per cent, from 0.81 per cent.
Provisions and contingencies of the bank during the quarter climbed more than 10-fold to Rs 321.90 crore as against Rs 27.24 crore a year earlier.
Among major public sector banks, Bank of Baroda's net profit fell 23 per cent to Rs 1,052 crore in the June quarter, dragged down by a fall in treasury income and higher staff expenses.
The bank had reported a profit after tax of Rs 1,362 crore in the same period last year.
Another public sector lender Dena Bank's net profit plunged to one-fifth to Rs 15.16 crore in the said quarter compared with Rs 81.52 crore in the year-ago period.
The asset quality of the bank worsened as gross non-performing assets (NPAs) or bad loans shot up to 6.2 per cent of advances during the quarter under review as against 4.21 per cent a year ago.
Net NPAs too rose to 4.24 per cent, from 2.94 per cent of net advances.
Vijaya Bank and Oriental Bank of Commerce (OBC) reported 12 per cent and 29 per cent decline in the net profit for the first quarter, respectively.
Higher provisioning for bad loans brought down the net profit of OBC by 29 per cent at Rs 257.84 crore as against Rs 364.54 crore in the first quarter a year ago.
Vijaya Bank net profit slumped to Rs 142.59 crore, from Rs 161.45 crore in April-June of last fiscal.
However, State Bank of Mysore, an associate of SBI, logged a 25.81 per cent increase in its profit at Rs 94.07 crore for the June quarter.
The bank had posted a net profit of Rs 74.77 crore in the corresponding quarter of the previous fiscal.
