Money & Banking

Lakshmi Vilas Bank posts net loss of ₹112 crore in Q1

Chennai | Updated on July 30, 2020 Published on July 30, 2020

Private sector lender Lakshmi Vilas Bank (LVB) on Thursday posted a year-on-year net loss of ₹112.28 crore for the first quarter of FY21 compared to a net loss of ₹237.25 crore for the same quarter last year. After several quarter of losses, the bank posted a net profit of ₹92.86 crore in the preceding quarter (Q4 FY20).

The bank posted an operating profit (before provisions and contingencies) of ₹8.86 lakh in the current quarter as against an operating loss of ₹25.55 crore in the year-ago quarter.

The capital-starved LVB, which has been under the RBI’s prompt corrective action (PCA) framework since September 2019, has been looking for suitors to stay afloat and come out of PCA norms.

The bank’s capital adequacy ratio (as per Basel III norms) fell drastically to 0.17 per cent during the first quarter from 6.46 per cent in the year-ago quarter.

“The Bank's Tier-1 Capital ratio has turned negative, at 0.88 per cent and 1.83 per cent as of March 31, and June 30, respectively, as compared to the minimum requirement of 8.875 per cent. This requires the Bank to take effective steps to augment its capital base in the year 2020-21. We are informed that the Bank routinely evaluates capital raising options,” a limited review report of auditors, enclosed with the financial results, noted.

LVB recently received a non-binding letter of intent (LoI) from AION Capital-backed Clix Capital Services and Clix Finance India for a proposed capital infusion and the bank during previous quarter results informed that due diligence process from both sides is currently under progress.

Provisions (other than tax) and contingencies came down 47 per cent to ₹112.37 crore (₹211.7 crore) during the latest quarter.

The asset quality of the lender further worsened during the quarter. Gross non-performing assets (NPA) as a percentage of total advances increased to 25.40 per cent in Q1FY21 from 17.30 per cent during the same quarter previous year. Net NPA also increased to 9.64 per cent (8.30 per cent) during this period.

Total income of the bank fell 20.43 per cent to ₹538.83 crore (₹677.17 crore) while interest income fell 29 per cent to ₹442.50 crore (₹623.94 crore) during the first quarter.

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Published on July 30, 2020
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