May 20, 2017 05:10 PM IST

This week in banking: Home loan rates slashed, RBI looks for CFO, mixed Q4 earnings

Here's a round-up of events in the banking sector in the last week.

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In the week gone by, fourth quarter results for major public sector banks poured in, and home loan interest rates turned cheaper.

Banking behemoth State Bank of India doubled its profits in the last quarter, while IDBI Bank doubled its loss with a spike in bad loans.

Home loan interest rates

Axis Bank cut home loan rates to an industry low of 8.35 percent for all customers. ICICI Bank also announced a rate cut on home loans.

Central Bank actions

The Reserve Bank of India announced applications are open for the post of CFO at the bank.

The banking regulator also came out with guidelines for banks to appoint Chief Technology Officer and Chief Financial Officer (CTO and CFO).

It also liberalised tier-I presence in new bank branch policy.

Virus attack

Amid the ransomware virus attack, the central bank asked banks to improve their banking systems including their ATM networks with a Windows security update to enhance security and protect them from the malware attack that took place last weekend.

Many ATMs, running on Windows and seen being vulnerable, are likely to remain closed for some time. Over 60 percent of the total 2.25 lakh ATMs in the country operate on the outdated Windows XP.

Fourth quarter financial results

State Bank of India reported a 122 percent jump in net profit to Rs 2,814 crore year-on-year as against Rs 1,263.81 crore in the same quarter last fiscal.

The net interest income surged by 17.3 percent (YoY) to Rs 18,070.7 crore for the quarter ended March.

Asset quality improved on QoQ basis. The gross non-performing assets (NPAs) showed slight moderation to 6.9 percent at the end of the March quarter compared with 7.23 percent reported in the previous quarter. On a year-on-year basis, gross NPAs stood at 6.5 percent.

On the other hand, IDBI Bank’s net loss widened to Rs 3200 crore in Q4 of FY17 following a substantial surge in provisioning towards the non-performing assets (NPAs) which to doubled from a year-ago period.

The state-owned bank had posted a net loss of Rs 1,736 crore in the corresponding quarter last year while the loss in the previous December quarter stood at Rs 2,255 crore.

During the quarter, gross NPAs, too, at 21.25 percent of total loans of Rs 44,753 crore, up from 10.98 percent at Rs 24,875 crore a year ago. Sequentially, the gross NPAs worsened from 15.16 percent as on December, 2016.

Public sector lender Indian Overseas Bank's net loss narrowed to Rs 646.66 crore in the last quarter of 2016-17 fiscal due to reduction in provisions for bad loans.

The bank had registered a net loss of Rs 936.19 crore in the same quarter of previous fiscal.

Net income declined to Rs 5,661.70 crore during the fourth quarter of 2016-17 from Rs 6,157.72 crore in same period a year-ago, the bank said in a BSE filing.

The bank's provisions for bad loans and contingencies decreased to Rs 1,789.74 crore during the March quarter from Rs 2,666.16 crore a year earlier.

Bank of Baroda and Punjab National Bank posted profits after a loss in the previous years.

Bank of Baroda posted a net profit at Rs 155 crore for the year but it declined from the December quarter.

Punjab National Bank turns black, posts Q4 profit at Rs 262 cr; asset quality improves but still high at 12.53 percent.

Public sector Allahabad Bank swung into black, registering a net profit of Rs 111.16 crore during the last quarter ended March 2017 as provisions for bad loans came down.

The bank had posted a net loss of Rs 581.13 crore during the corresponding quarter of preceding fiscal due to RBI's prudential norms on asset classification requiring banks to provide for a higher coverage for bad loans.

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