Lead by PSBs, NPAs soar 34.5% in December quarter, pain to linger on: Care report

The issue of impaired assets may be far from over for the banking system as gross non-performing assets have grown by 34.5 percent in the December quarter, says a Care report.

PTI February 13, 2018 16:41:28 IST
Lead by PSBs, NPAs soar 34.5% in December quarter, pain to linger on: Care report

Mumbai: The issue of impaired assets may be far from over for the banking system as gross non-performing assets have grown by 34.5 percent in the December quarter, says a report.

Even as bankers guide towards a better position with regard to bad loans, rating agency Care has said the issue of impaired assets is not yet over, including on recognition and accretion of loans into the dud assets category.

Lead by PSBs NPAs soar 345 in December quarter pain to linger on Care report

Representational image. Reuters.

In the report based on the performances of 30 lenders, including 17 private sector banks and 13 state-run ones, the agency said the quantum of gross NPAs moved up to 9.45 percent as of December from 8.34 percent a year ago.

While private sector banks' bad loans ratio was maintained broadly at 4.1 percent, their state-run counterparts registered a spike in the proportion of dud assets at 12.4 percent.

"It does appear that the worst may not yet be over for public sector banks with regards to NPAs and March 2018 would be the next touch point that will provide further guidance," Care said.

Public sector banks had a weaker performance on various indicators, including the key parameter of NPAs and also profitability, according to the agency.

While the private sector lenders' profitability grew during the quarter, the state-run ones faced a loss of Rs 11,000 crore, primarily dented by their provisions of Rs 51,000 crore.

Interest income grew 8.9 percent as against a 2.3 percent increase in interest expenditure, while net interest income for these 30 banks shot up 22.4 percent, it said, adding other income declined due to hardening of the bond yields.

Updated Date:

also read

Bad loans of Indian banks cross Rs 8,00,000 cr: Banking mess explained in 7 charts
Business

Bad loans of Indian banks cross Rs 8,00,000 cr: Banking mess explained in 7 charts

Public sector banks' gross NPAs jumping past Rs 7 lakh crore in June 2017 quarter

Bad loan burden: Three reasons why it's a long and hard drawn battle ahead for Indian banks
Business

Bad loan burden: Three reasons why it's a long and hard drawn battle ahead for Indian banks

This time round it may not be easy for the banking system as a whole to revive in next three to five years

RBI puts Bank of India under watch; initiates 'corrective action' for mounting bad loans
Business

RBI puts Bank of India under watch; initiates 'corrective action' for mounting bad loans

In a filing to stock exchanges, Bank of India said Reserve Bank of India has placed it under Prompt Corrective Action Framework, consequent to the onsite inspection under the risk based supervision model carried out for the year ended March 2017.