Bank of Baroda on Friday said the public lender has “absolutely no concern” about its exposure to tumult-hit Adani Group. After announcing December quarter results, the banks said its exposure to Adani Group is one fourth of the large exposure framework of RBI. “As percentage of balance sheet, exposure to Adani Group has come down,” Reuters quoted a bank executive as saying.
The executive said the lender got no request from Adani Group for refinance till now.
“30% of total exposure to Adani Group is a joint venture with public sector companies,” said the bank’s executive.
Adani Group companies’ market value has move than halved to less than $100 billion after a critical report last week by a US short seller Hindenburg Research.
Read More: Govt announces substantial hike in windfall tax on locally produced crude oil, diesel and ATF
Finance Secretary T V Somanathan told a news channel there was no cause for concern for depositors, policyholders or investors in any PSU banks or LIC amid stock rout.
The exposure of the State Bank of India and the Life Insurance Corporation of India in any company is far below the level where it should be a concern for investors, Somanathan told the channel.
SBI chairman Dinesh Khara said at a post-earnings press conference on Friday that the bank didn’t envisage any challenges from Adani Group, but further financing for its projects would be evaluated on merit.
“As far as going forward, each project will be evaluated on its own merit. And also it is a discussion which is vested with the credit committees. So everybody will be very mindful about what the situations are and accordingly decisions are taken,” said Khara.
A day after the share offering was pulled, Gautam Adani said the group’s cash flow was “very strong” and it would review capital raising once the market stabilised. He said the group had an “impeccable” track record of fulfilling debt obligations.
Credit rating agency Moody’s said on Friday the adverse developments around Adani were likely to reduce its ability to raise capital to “fund committed capex or refinance maturing debt” over the next one to two years.
Read More: Know Google CEO Sundar Pichai’s Income After Pay Cut
However, it said a portion of Adani’s capital expenditure was deferrable, and its rated entities did not have significant maturing debt until fiscal year 2025.
Bank of Baroda on Friday reported 75% surge in standalone net profit at Rs 3,853 crore for the third quarter ended December 31, 2022 as bad loans declined.
The state-owned bank had earned a net profit of Rs 2,197 crore in the year-ago period.
Total income during October-December 2022 increased to Rs 27,092 crore as against Rs 20,482 crore in the year-ago period, BoB said in a regulatory filing.
During the quarter, interest income increased to Rs 23,540 crore as against Rs 17,963 crore in the same period a year ago.
On the asset quality front, the bank recorded an improvement with gross NPAs (Non-Performing Assets) declining to 4.53% as compared to 7.25% at the end of the third quarter of 2021-22.
At the same time, net NPAs eased to 0.99% as against 2.25% in the same period a year ago.
