DBS Bank sees sharp rise in bad loans after Lakshmi Vilas Bank merger – The New Indian Express
NEW DELHI: DBS Bank India (DBIL), the wholly-owned subsidiary of DBS Bank of Singapore, saw a sharp increase in bad debts as gross non-performing assets (NPA) rose sharply to 12.93% over the course of of fiscal year 21 after the merger of Lakshmi Vilas Bank (LVB), compared to only 2.6% in March 2020.
Net NPA stood at 2.83% at the end of March 2021 compared to 0.47% in March 2020, with a provision coverage ratio of 84%. Excluding the LVB portfolio, gross ANP remained moderate at 1.83%.
“We have made considerable progress with the integration of Lakshmi Vilas Bank (LVB) since the merger in November 2020 even with the dislocations due to the second wave of the pandemic. Although, as expected, there was an immediate impact on our financial results due to the high net NPAs and operating losses at LVB, we are confident of realizing the long-term prospects of the combined franchise, ”said Surojit Shome, Managing Director and CEO. , DBS Bank India.
However, the lender was able to record an almost three-fold increase in its net profit to Rs 312 crore for the fiscal year ended March 2021 (FY21), up from Rs 111 crore in FY20. During the year under review, net income increased by 85% to reach Rs 2,673 crore (including Rs 134 crore of LVB).
Following the merger with the private sector old age bank, Shome said the bank has already been able to revitalize the gold lending business and increase deposits. DBS Bank India reported a 44% increase in global deposits to Rs 51,051 crore, including Rs 18,823 crore from LVB. Savings deposits increased 207%, the current account increased 98% year on year.