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Bank of Baroda posts net loss of Rs 3,342 crore; highest ever in industry

Bank of Baroda reported on Saturday the highest-ever quarterly loss in the nation's banking history at Rs 3,342 crore for the October-December period after recognising and providing for the entire quantum of stressed assets identified through a special review undertaken by RBI.

The country's second-largest lender declared that there will be no more surprises in store for the bank, and that a process of reorganization is underway.

Despite profits being badgered by an over two-fold jump in non-performing assets at over Rs 38,000 crore, the state-run bank asserted it will not seek any capital infusion from the government but would rather work on generating the money internally, including sale of non-core assets.

Its newly inducted managing director and chief executive PS Jayakumar said through the clean-up and reorganisation exercise, the bank is confident of posting "reasonable level" of profit next fiscal year.

The gross NPA ratio zoomed to 9.68 per cent on fresh slippages of Rs 15,603 crore in the third quarter under review as against Rs 3,042 crore in the year-ago period. This resulted in a nearly five-fold jump in overall provisions and contingencies at Rs 6,164.55 crore.

Executive director BB Joshi said half of the slippages and 30 per cent of provisions can be attributed to the RBI's asset quality review (AQR), wherein it has asked the Vadodara-headquartered lender to identify 30 accounts as NPAs.

He added that despite the regulatory window to recognise the heightened stress in two quarters, it has done so in a single three-month period and there will not be "significant" reverses from next quarter.

"We have put the uncertainty behind us. If something has to be done, it might as well be done now. As far as we can see, we have taken all the required provisions, from here onwards, we expect a fair bit of stability in the outcome of the portfolio," Jayakumar told reporters.

Jayakumar, who joined the bank four months ago as part of a new government initiative to professionalize management of state-run lenders, recounted an instance from his days at American lender Citigroup where it took a $ 3 billion hit on account of certain issues in 1986.

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