LVB Q2 net declines 83% on higher provisioning for bad loans

span.p-content div[id^=div-gpt] { line-height: 0px; font-size: 0px;} (LVB) has posted a decline of 83.8 per cent in net profit at Rs 10.50 crore during the quarter ended September 30, 2017, as compared to Rs 64.84 crore during the same quarter of the previous fiscal. The non-performing asset (NPA) level of the bank has gone up during the quarter.

The decline is due to higher provisioning for bad loans and impact of a commodity finance transaction fraud took place at some of its branches, said the Bank officials.

Total income during the quarter grew 8.7 per cent to Rs 902.75 crore from Rs 830.29 crore during the same quarter a year ago. Gross rose to 5.50 per cent of advances from 2.70 per cent during the year-ago quarter. Net stood at 4.33 per cent during the quarter, as against 1.8 per cent.

Parthasarathi Mukherjee, MD and CEO, LVB, said the provisioning for bad loans rose to Rs 199 crore during the quarter, from Rs 69.89 crore during the same period of last year. Provisioning for the nine accounts listed in the defaulters' list of the Reserve Bank of India, which were taken to NCLT, was over Rs 50 crore, he said.

The performance was also impacted by a fraudilent activity was around Rs 80 crore, in which funds were provided against commodities in warehouses with certificates from experienced collateral managers. However, the certificates were found to be fraudulent, he added. The bank has initiated action against the borrowers and collateral managers.

The Bank's watchlist of accounts that could move to bad loans is currently worth around Rs 1,700 crore, he said.

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