The Hindu : Business : Global Trust's loss at Rs. 812 crores

Online edition of India's National Newspaper
Tuesday, Aug 10, 2004

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Business

Global Trust's loss at Rs. 812 crores

By Our Special Correspondent

HYDERABAD, AUG 9. Global Trust Bank (GTB), which is proposed to be merged with Oriental Bank of Commerce (OBC), has reported a massive loss of Rs. 812.38 crores for the year ended March 31, 2004. For the previous year, it had reported a loss of Rs. 272 crores.

The accumulated loss as of March 31, 2004 exceeds the capital and reserves and surplus by Rs. 810.18 crores. Equity was Rs. 121.36 crores.

Accumulated losses were Rs. 118.92 crores as of March 2003, which went up to Rs. 931.54 crores by March 31, 2004.

A press release issued after the board of directors approved the audited accounts at a meeting here on Monday said the board expressed happiness at the prompt action of RBI to amalgamate GTB with OBC, thereby protecting the interests of lakhs of customers. It said that the accounts were finalised in the backdrop of the proposed amalgamation, and "Accordingly the accounts have been drawn up on a conservative basis".

It said focus on recovery continued, and an additional Rs. 323 crores were recovered from NPAs and written off accounts during the year under review. The loss, it said, is on account of provisioning of about Rs. 535 crores necessitated by "aging and weakening of security of earlier NPAs", operating loss of Rs. 79 crores, and about Rs. 164 crores towards accelerated and prudent provisioning on select items, with another Rs. 35 crores on account of other provisions.

It might be recalled the RBI placed a moratorium in respect of Global Trust Bank from July 24 to October 23, and prepared a draft scheme for amalgamation with OBC.

The release said that the accounts have been prepared on a `Going concern basis' in view of the merger.

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