India Banks Bad Loans Rise Slowest in Two Years
India Banks Bad Loans Rise Slowest in Two Years

India Banks Bad Loans Rise Slowest in Two Years

India Banks Bad Loans Rise Slowest in Two Years

Bad loans at India’s 38 listed banks rose at the slowest pace in eight quarters, suggesting that the toughest phase of the bank balance sheet clean-up may be still lagging.
Data compiled by BloombergQuint, based on quarterly earnings of banks, shows that gross non-performing assets of listed banks rose to Rs 8.4 lakh crore ($1.2 trillion), compared to Rs 8.29 lakh crore in the previous quarter. The 1.3% quarter-on-quarter increase is the slowest since the asset quality review began in the September 2015 quarter.
The Reserve Bank of India had conducted the review as it feared that stressed assets were being under-reported. What followed was an increase in the reported gross NPAs across both public sector and private sector banks.
Between the September 2015 and September 2017 quarters, gross NPAs have surged from Rs 3.4 lakh crore to Rs 8.4 lakh crore, shows the analysis.
The data for the September 2015 quarter does not include IDFC Bank, since it started reporting as a listed entity from the December 2015 quarter. For State Bank of India, consolidated numbers have been taken starting March 2017 following a merger with its associate banks.
While data suggests that the rate of increase in gross NPAs may have flattened out, risks remain. Over the next two quarters, some banks may add to gross NPAs once the regulator communicates the divergence in bad loan assessment for financial year 2017.
In the September 2017 quarter, Axis Bank Ltd. reported a divergence of Rs 5,633 crore. The bank recognized such divergence and reclassified nine accounts with outstanding balance of Rs 4,867 crore as non-performing in the fiscal second quarter.
The RBI’s assessment of Yes Bank’s gross bad loans was Rs 6,355.20 crore more than what the lender had reported at the end of March. However, only Rs 1,219.4 crore were classified as non-performing assets because it either received payments or upgraded other accounts.
Other lenders like ICICI Bank Ltd. and SBI have said they are awaiting communication from the regulator.
Accounts which have been restructured under various schemes, such as Strategic Debt Restructuring, could also add to the bad loan pile if resolution does not take place in time. In an interview to BloombergQuint on Monday, Ashish Gupta, head of research at Credit Suisse, said that about 5% of total banking system loans are stressed but still not recognized as bad loans.


Short URL : https://goo.gl/oJLkrg
  1. https://goo.gl/GYAb3p
  • https://goo.gl/vuYH5k
  • https://goo.gl/rm6Kxi
  • https://goo.gl/7Myr6o
  • https://goo.gl/FD4RgX

You can also read ...

Blue Economy Movement Gaining Traction in Africa
An increasing number of African countries are now embracing...
Striking Amazon Employees in Europe Demand Better Working Conditions
Thousands of workers walked off their jobs on Tuesday at...
There are indications that investments in digital economy will...
The trade war began when Donald Trump introduced tariffs on imported steel and aluminum.
Rising trade tensions between the United States and the rest...
Japanese Prime Minister Shinzo Abe (C) speaks as European Commission President Jean-Claude Juncker (L) and European Council President Donald Tusk listen during  a joint press conference at Abe’s official residence in Tokyo on July 17.
Japan and the European Union signed a landmark deal on Tuesday...
SNB to Raise Rates in 2019
The Swiss National Bank will continue tracking its eurozone...
The parliament approved a five billion pound start-up capital for the fund called “Egypt Fund”.
Egypt is setting up a sovereign wealth fund with a capital of...
Hedge Funds End H1 in Red
Hedge Funds ended the first half in negative territory as the...

Add new comment

Read our comment policy before posting your viewpoints