IOB to write off over Rs 7,000 crore losses

The share premium account is an equity account on a company’s balance sheet and the amount in the account represents the additional amount shareholders paid for their issued shares that was in excess of the par value of those shares. 

The bank said it has a balance availability in the share premium account of Rs7,650.06 crore as on 31 March 2017. The board of directors today considered and approved to utilise the balance to “write off the accumulated losses of the bank aggregating to Rs6,978.94 crore as at March 31, 2017,” the bank said in a regulatory filing.

Indian Overseas Bank said it is being done to present a true and fair view of the financial position of the bank and to take the same into account during the current financial year 2017-18. 

The bank has convened an extraordinary general meeting of shareholders on 30 January to get shareholders’ approval for this write off, it added. For the fiscal ended March 2017, the bank had reported a net loss of Rs3,416.74 crore on its balance sheet because of huge amount of bad assets, with the gross non-performing assets (NPAs) hitting 22.39% of the gross advances as on 31March 2017.

In the second quarter ended September of the current financial year, bank widened its net losses at Rs1,222.50 crore, against Rs765.13 crore loss in same quarter of 2016- 17. The gross NPAs or bad loans stood at 22.73% as on 30 September 2017, up from 21.77% by the same period of 2016.