During the quarter ended September, the bank reported a net loss of Rs 397 crore, but saw a marginal improvement in its asset quality.

Lkashmi Vilas Bank HQImage: Lvbankwebmaster via Wikimedia Commons (CC BY-SA 3.0)
Money Banking Monday, November 09, 2020 - 10:33
Written by  IANS

Lakshmi Vilas Bank's sustenance as a going concern is dependent on its ability to improve liquidity, asset quality and capital base, according to the auditors of the bank. In the bank's July-September earnings, the auditors said that as per the opinion of the bank, based on their internal assessment and the likely capital infusion, the lender will be able to realise its assets and discharge its liabilities in its normal course of business and hence the financial results have been prepared on a going concern basis.

"The said assumption of going concern is dependent upon the bank's ability to achieve improvements in liquidity, asset quality and solvency ratios, augment its capital base and mitigate the impact of Covid-19 and thus a material uncertainty exists that may cast a significant doubt on the Bank's ability to continue as a going concern," they said as per the bank's regulatory filing.

"However, the bank opines that there are mitigating factors to such uncertainties," it said.

During the quarter ended September, the bank reported a net loss of Rs 397 crore, compared to Rs 357 crore during the same period last fiscal. It saw a business of Rs 37,595 crore in total as on September 30, 2020, as against a total business of Rs 47,115 crore in 2019. It saw its bulk deposits drastically fall to Rs 911 crore from Rs 1,893 crore on September 30, 2019.

The banks saw a marginal improvement in its asset quality. Gross non-performing asset (GNPA) ratio stood at 24.45 per cent as of September compared with 25.4 per cent as of June. Net NPA ratio improved to 7 per cent from 9.64 per cent in the previous quarter.

On September 25, the shareholders of the bank ousted seven directors and auditors at the bankā€™s Annual General Meeting (AGM), including the recently appointed RBI-approved MD and CEO S Sundar, leaving the 94-year-old bank headless.

Also read: What is ailing Chennaiā€™s Lakshmi Vilas Bank and should depositors be worried?


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