Talks for merger with Clix Group on: Lakshmi Vilas Bank

The bank claimed its liquidity position, as on September 27, is comfortable, with liquidity coverage ratio (LCR) in excess of 250% against the minimum 100 % required.The bank claimed its liquidity position, as on September 27, is comfortable, with liquidity coverage ratio (LCR) in excess of 250% against the minimum 100 % required.

The capital-starved and loss-making Lakshmi Vilas Bank (LVB) on Sunday said it will continue to evaluate the proposed amalgamation of the Clix Group with it adding the mutual due diligence is substantially complete. The bank is in the midst of a crisis after shareholders on Friday blocked the appointment or re-appointment of seven directors to the board including that of S Sundar, MD&CEO.

They also voted against the re-appointment of statutory auditors P Chandrasekar LLP, chartered accountants and branch auditors. The AGM saw shareholders approving a resolution authorising the bank to raise capital via an FPO, rights issue, QIP or any other route and also the increase of the lender’s share capital to Rs 1,000 crore from Rs 650 crore. In a release, signed by independent director Shakti Sinha, the bank said it would continue its focus on capital-light loans like gold loans to optimise profitability without straining capital funds.

LVB claimed it continues to have a fully functional board of directors including three independent directors saying that till a new managing director is appointed, the existing senior management team along with the board will discharge the day-to-day affairs.

LVB, which has been placed under RBI’s prompt corrective action since 2019, had narrowed its net loss to Rs 112.28 crore for Q1FY21 from a net loss of Rs 237.25 crore in Q1FY20. The lender’s total income declined by 20.4% to Rs 538.83 crore. Signalling a further deterioration in the asset quality, gross NPA rose to 25.40% in the reporting quarter, from 17.30% in the corresponding quarter of the last fiscal. Similarly, the net NPA increased to 9.64% from 8.30%. The provision coverage ratio had stood at 72.58%.

According to Annual Report 2020, LVB had a capital adequacy ratio of just 1.12% as on March 31 as against the RBI requirement of 8%. The lender’s tier I and II components of CAR stood at a negative 0.88% and 2%, respectively.

The bank claimed its liquidity position, as on September 27, is comfortable, with liquidity coverage ratio (LCR) in excess of 250% against the minimum 100 % required.

Apart from Sundar, the other directors whose appointments or re-appointments were rejected by shareholders were N Saiprasad, Gorinka Jaganmohan Rao, Raghuraj Gujja, KR Pradeep, BK Manjunath and YN Lakshminarayana Murthy. LVB had attempted to merge with Indiabulls Housing Finance last year but the Reserve Bank of India (RBI) rejected the deal.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Mohali: Two minor boys arrested gangraping 7-year-old girl

Sun Sep 27 , 2020
By: Express News Service | Mohali | September 28, 2020 4:05:32 am Matour Station House Officer (SHO) Inspector Rajiv Kumar said that they had arrested both the accused and the court had sent them to the juvenile home. Matour police Sunday arrested two minor boys who allegedly gangraped a 7-year-old […]