BoB’s Board approves setting off accumulated losses of Rs 11,048 crore
[ad_1]
Read More/Less
The Board of Directors of Bank of Baroda (BoB) has given its nod to set off the bank’s accumulated losses of Rs 11,048.44 crore as at March-end 2021 by utilizing an equivalent amount standing to the credit of the Share Premium Account (SPA).
The set off of the accumulated losses against SPA will be taken into account during current Financial year 2021-22, subject to necessary approval from shareholders and prior permission from the Reserve Bank of India (RBI), the public sector bank said in an exchange filing on Saturday.
Bankers opine that the aforementioned exercise will present the true and fair view of the Bank’s financial position. It will not affect any ratios such as book value per share, Return on Equity (ROE), Earning per share (EPS).
As the proposed exercise would be deemed to be a capital reduction, approval of the Bank’s shareholders by way of a Special Resolution will have to be sought.
Analysts, however, say the capital adequacy ratio (CAR) of banks will decline due to the setting-off of the accumulated losses at one go.
Besides common shares, statutory reserves, and capital reserves, among others, share premium is one of the important components of Common Equity Tier 1 Capital.
[ad_2]