Private sector lender Lakshmi Vilas Bank’s (LVB) standalone net loss for the first quarter ended June 2019 widened to ₹237 crore from ₹124 crore registered during the corresponding year-earlier period on a fall in interest income and higher provisioning.
“Capital is scarce. Credit book is not growing and it continues to affect our profits,” said Parthasarathi Mukherjee, MD and CEO, Lakshmi Vilas Bank.
“Efforts are on to raise capital. The process has started. Soon after the impending merger with Indiabulls Housing Finance, all the issues will be taken care of,” he said.
Asked how long could they manage without funds, he said that they had been managing it for the last few quarters. “Hopefully, this might not go on for long,” he said.
Net interest income stood at ₹123 crore against ₹130 crore. Net interest margin rose to 1.65% from 1.48%. Capital adequacy ratio came down to 6.46% from 9.45%.
Provisions and contingencies rose to ₹212 crore compared with ₹162 crore in the year-earlier period. Other income dipped to ₹53 crore from ₹61 crore in the year-earlier period.
Gross non-performing assets as a percentage of gross advances increased to 17.30% from 10.73%. Provision coverage ratio stood at 63.08%. Net NPAs rose to 8.30% from 5.96%.
While asserting that LVB had no exposure to Cafe Coffee Day or its subsidiaries, the bank said it had funded the coffee growers and suppliers of coffee beans of Coffee Day Global Ltd. (CDGL) in the normal course of business against the receivables from CDGL. In addition, the bank had funded two loans backed by collaterals of fixed deposit, land and fixed assets.
Regarding its merger with Indiabulls Housing Finance Ltd. LVB said while the Competition Commission of India had given its nod, it was awaiting approvals from the Reserve Bank of India and other regulatory authorities.