Lakshmi Vilas Bank Q2 results: Loss widens to Rs 397 crore; to raise Rs 500 crore via rights issue

Private sector lender Lakshmi Vilas Bank on Saturday reported widening of its loss to Rs 396.99 crore for the second quarter ended September 30, 2020. The bank had posted net loss of Rs 357.17 crore in the same quarter of the last financial year. The South-headquartered bank has been making losses for the last three years and needs urgent capital infusion.

The bank's board has approved the issue by equity shares upto Rs 500 crore by way of rights issue. ICICI Securities has been appointed as the merchant Banker for the issue. In August, it board had approved fundraising plans for Rs 1,500 crore. The board had also approved increasing foreign shareholding of up to 74 per cent from the current 12.35 per cent.

For July-September quarter of this fiscal, the bank recorded operating loss of Rs 5.66 crore as against the operating loss of Rs 40.37 crore during the September quarter of last financial year, Lakshmi Vilas Bank said in a regulatory filing.

The south-based private sector bank's net interest income (NII), the difference between interest earned and interest expended, declined 28 per cent to Rs 79.5 crore. Net interest margin fell to 1.37 per cent for Q2FY21 against 1.47 per cent in the same previous last year.

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Provision and contingencies rose to Rs 391.33 crore in July-September quarter of this fiscal as against Rs 316.80 crore in the same period a year ago.

On the asset front, gross non-performing assets (NPAs) ratio as a percentage of gross advances continued to remain at an elevated level of 24.45 per cent in Q2 FY21, higher than 21.25 per cent in Q2 FY20. The percentage of net NPA stood at 7.01 per cent against 10.47 per cent last year.

As of September 30, 2020, the bank's total Capital Adequacy Ratio (CAR) stood at 2.85 per cent as against 1.12 per cent in Q4 FY20, meeting Basel III guidelines.

The private lender also informed that Praveen Kumar Molri has been co-opted as additional director of the bank in the category of non-executive and independent director.

Also Read: EXCLUSIVE: Lakshmi Vilas Bank a strategic opportunity, due diligence process on, says CLIX Capital

On proposed merger with Clix Group, the bank said it has made "significant progress" and it has completed a minor incremental due diligence this week as requested by Clix Group. "Now, the respective sides are in the process of a workable and mutually acceptable framework," the bank said.

On June 15, 2020, the bank signed a preliminary, non-binding letter of intent with Clix Capital Services and Clix Finance India for a possible amalgamation with the Clix Group.

Also Read: Lakshmi Vilas Bank in talks for capital infusion; expects to mop up Rs 1,000 crore

At its AGM (annual general meeting) on September 25, the bank's shareholders rejected the reappointment of seven of the directors on its board, comprising the bank's interim MD and CEO, S. Sunday.

Ahead of Q2 results, shares of Lakshmi Vilas Bank ended Friday's trade flat at Rs 15.60 on the Bombay Stock Exchange.