Dena Bank shares soar 9% despite loss widening to Rs 416.70 crore in Q2FY19

The share price of Dena Bank was performing quite interestingly today! Investors did not even seem to be bothered about the bank reporting heavy losses in its September 2018 quarter result. Dena Bank today released its Q2FY19 result and revealed that its net loss has widened to Rs 416.70 crore compared to the net losses recorded in Q2FY18 when the amount stood at Rs 185.02 crore. However, the Q2FY19 net loss was narrowed compared to loss recorded in Q1FY19 of Rs 721.71 crore. 

On the other hand, Dena Bank's net interest income (NII) came in at Rs 725.63 crore during this quarter, which was up by 20.80% from Ts 600.67 crore in Q2FY18, however, down by 2.30% versus Rs 742.74 crore in Q1FY19.

Provisions stood at Rs 867.83 crore in Q2FY19, which was up by 17.81% versus Rs 736.66 crore in Q2FY18, but down by 22.43% from Rs 1,275.72 crore in Q1FY19. 

Meanwhile, gross NPA was at Rs 16,140.39 crore in Q2FY19, higher by 22.26% from Rs 13,201.27 crore in Q2FY18 and also up by 1.79% as against Rs 15,856.11 crore in Q1FY19. 

In percentage terms, Dena Bank's gross NPA was at 23.4% versus 22.69% in Q1FY19 and 17.23% in Q2FY18. 

For six months period of FY19, Dena Ban k's NII stood at Rs 1,468.37 crore up by 14.10% from Rs 1,275.72 crore a year ago same period. However, net loss widens to Rs 1,138.41 crore in H1FY19 versus losses of Rs 317.67 crore in H1FY18. 

The above mentioned result indicates the trouble of Dena Bank is getting worse. However, investors are quite optimistic on the bank since the time government announced its merger with Bank of Baroda and Vijaya Bank. These two banks are far better positioned in comparison with Dena Bank and its merger comes as good news for it. 

Looking at the result, it becomes one more reason to why Dena Bank's merger should be expedited with BoB and Vijaya. Today, BoB will be announcing its result and any merger detail announcement will be keenly watched. Vijaya has posted its Q2FY19 result, where it has managed to bring down its gross NPA with heavy margins. 

For now investors are positive on Dena Bank, as it was trading at Rs 16.20 per piece up by 3.85% on Sensex. The bank rose to intraday high of Rs 17.05 per piece making an overall gain by 9.24%.