Even as the government is pushing the Reserve Bank of India to relax prompt corrective action (PCA) norms for weak banks and allow some of them to restart lending, a look into their key financial metrics over the last one year does not paint an optimistic picture. While none of the 11 banks have shown reduction in their gross non-performing assets (GNPA), only four banks reported improvement on the profitability front.
A comparison of gross NPA and profitability of 11 banks in September 2018 quarter over September 2017 quarter shows that while Oriental Bank of Commerce, Corporation Bank and Bank of Maharashtra showed improvement in their profitability; IDBI Bank, Uco Bank, Dena Bank and Allahabad Bank reported marked deterioration in profitability and NPAs. While Corporation Bank, Oriental Bank of Commerce and Bank of Maharashtra reported profits in the July-September quarter, as against losses reported in the same quarter last year, Indian Overseas Bank was able to reduce its net loss to Rs 487.26 crore in July-September 2018 from a net loss of Rs 1,222.5 crore in July-September 2017. The other seven PCA banks, however, reported significant jump in net losses.
IDBI Bank remained the worst performer reporting gross NPA of 31.78 per cent in July-September 2018, up from 24.98 per cent in July-September 2017 — the highest among the 11 PCA banks. It also reported record losses of Rs 3,602.5 crore, up from Rs 197.84 crore during the same period — again the highest among the PCA banks.