Global Trust Bank on Tuesday declared a net loss of Rs 272.70 crore (Rs 2.73 billion) for the financial year ended March 31, 2003.

This follows provisioning and write-offs worth Rs 309.14 crore (R 3.09 billion) made to clean up the bank's balance sheet.

GTB's accumulated loss as on March 31 stood at Rs 118.92 crore (Rs 1.19 billion), after taking into account its Rs 272.96 crore reserves (as on March 31 2002).

Though the bank posted an operating profit of Rs 36.44 crore (Rs 364.4 million) for the year from normal operations, it had to make huge provisioning for non-performing assets.

These bad assets were a result of GTB's exposure to the capital market and other sensitive sectors in the earlier years.

The bank's networth as on March 31, 2003, stood at Rs 2.44 crore (Rs 24.4 million), while its capital adequacy ratio was at an incredibly low 0.2 per cent against the norm of 9 per cent.

"It happened because we took a one-time beating. Once fresh capital is infused soon, we will be back to normal levels," Sudhakar Gande, managing director of the bank, said.

Meantime, for the quarter to June 30, 2003, the bank has posted a net profit of Rs 4.59 crore (Rs 45.9 million). It also recovered over Rs 293 crore (Rs 2.93 billion) worth of NPAs during 2002-03.

Further, additional securities amounting to Rs 200 crore (Rs 2 billion) was obtained in certain accounts.

"All the problems of the past have been sorted out and the balance sheet has been cleaned up by making provisions in accordance with the Reserve Bank of India guidelines. We have already made a profit in the first quarter of this fiscal and I am confident that we will continue to make profits in the coming quarters," Gande said.

"To meet the gap in capital, we are in advance talks with two reputed international funds/strategic investors. Over the next 3-4 weeks, a final picture would emerge and we are planning to raise over Rs 500 crore (Rs 5 billion)," he added.

According to sources, the bank will consider writing down paid-up capital to set off accumulated losses at the time of finalising investment by the strategic/financial investors.

"This will be part of the whole package that will be announced before October-end," a source associated with the development said.

Lazard India Ltd and JM Morgan Stanley are the financial advisors to GTB on this.

Meanwhile, the GTB board today accepted the resignations of directors J V Shetty and S B Ghosh.

The two directors had submitted their resignations at the last board meeting.

RBI pat: Meanwhile, the Reserve Bank of India has appreciated the bank for its efforts to recover NPAs and clean up the balance sheet.

"The results indicate that the present management had made special efforts in recoveries... and have also made necessary provisions in accordance with the guidelines", the RBI said in a release.