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Lakshmi Vilas Bank expects recoveries to be higher than slippages in coming quarters

Updated : May 29, 2019 12:18 PM IST

Private lender Lakshmi Vilas Bank reported a lower net loss of Rs 264.43 crore for the quarter ending March 2019 compared to Rs 622.25 crore in the year-ago period due to a decline in provisioning for bad loans. Total income of the lender fell to Rs 739.73 crore during the January-March quarter of 2018-19 from Rs 740.91 crore in the same quarter of the preceding fiscal.

The asset quality of the bank worsened as the gross non-performing assets (NPAs) hit 15.30 percent of gross loans at the end March 2019, as against 9.98 percent by March 2018. Net NPAs or bad loans too shot up to 7.49 percent from 5.66 percent. In absolute term, gross NPAs were at Rs 3,358.99 crore by the end of 2018-19, higher than Rs 2,694.21 crore year ago. Net NPAs rose to Rs 1,506.29 crore from Rs 1,457.89 crore.

It was a weak quarter for Lakshmi Vilas Bank as it was the only bank to report a double-digit decline in business on a year-on-year (YoY) as well as a sequential basis. P Mukherjee, MD and CEO, Lakshmi Vilas Bank, shared his views and outlook.

On the proposed merger with Indiabulls Housing Finance, Mukherjee said the scheme is subject to receipt of approval from the Reserve Bank of India (RBI) and other regulatory nods. “We have filed the application, it is with them (RBI) at the moment but we haven’t heard anything from them yet," he said.

“This is the first quarter in many when the recoveries have been greater than the slippages and hopefully from here onwards you will see the turnaround," added Mukherjee.

"This quarter we had slippages of about Rs 207 crore but that came from about 600 accounts. The largest single slippage was Rs 20 crore. On the other hand, there have been good recoveries and we have a lot more in the pipeline. So I am quite sanguine here that hereafter you will see a lot more coming of the recoveries,” he said.

“The focus, particularly at the moment for us, is to rebuild the lending book now gradually, to recover substantially from the bad loans and keep a strict control on costs. We have kept costs under control, the overall rising cost was up by only about 2 percent or so. This year we don’t intend to open any branches. I am very hopeful that at least on the recovery front, we will do very well this year,” said Mukherjee.
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