About the Company:
Most customer centric and service-driven bank with branches all over the country was incorporated in 2004. The bank has been through major toil and turmoil in past two years due to pile-up of junk loans and Non-Performing Assets. Recently, the bank has been backed by SBI and other prominent banks to continue their primary activities.
India’s most distressed bank has declared the results for the fourth quarter of financial year ending March 2020.
- Net Interest Income: NII is the difference between interest earned and interest expended that is the key factor for bank’s financial health status, is advanced by 19.68% QoQ while on YoY basis, there is a sharp decline of 49.31% in interest expended is grown more than interest earned.
- Net Profit After Tax: On QoQ basis, the bank has posted 80.44% down Profit after Tax led by heavy provisions and contingencies.
- Provisions and Contingencies: Bank's provisions and contingencies are landed to Rs 483,202 Lakhs are increased by 32.06% QoQ.
- Net NPA: Net NPA ratios is doubled this year, which shows that asset quality of the bank is vulnerable now.
As per LokeshSethia, SEBI Registered Research Analyst, the bank has has witnessed a spree of default cases from its promoters and stakeholders. The bank has been supported by SBI and other banks recently in order to survive the confidence of the depositers. Major concern for the bank is the loss of confidence that has been observed by a 54% drop in total deposits. The primary activities of the bank including accepting deposits and advancing loans have plunged after the former CEO Ravneet Gill's decision of 'Kitchen Sink' (Disclosure of all Non-Performing Assets). The bank has also failed to maintain its Tier -1 Capital Adequancy ratio. We advise you to 'Avoid' this stock.