Sunday, May 10, 2009

NPA of banks rising alarmingly

I had written about ICICI bank NPAs rising alarmingly earlier. It seems the same applies to other banks too. SBI reported 45% increase in net profit for quarter ended March 2009 but the Net NPA has risen from INR 7424.34 Crore in March 2008 to INR 9552.02 Crore in March 2009. In percentage terms it has declined from 1.78% to 1.76%, this is despite RBI providing respite of restructuring loans. ICICI Bank Net NPAs have also risen from INR 3490.55 Crore in March 2008 to INR 4553.94 Crore in March 2009. In percentage terms it has risen from 1.55% to 2.09%. Some prudent banks have considered restructured loans as NPAs as in case of HDFC Bank, which saw Net NPA rising from INR 298.52 Crore in March 2008 to
INR 627.62 Crore in March 2009. If you look at some of the figures related to restructured loans at BOI-INR 4800 Crore, Central Bank-INR 1803 Crore, Karnataka Bank-INR 350 Crore, IOB-INR 5000 Crore and Others-INR 5000 Crore, it is pretty big. CRISIL has already come out with a report recently that Gross NPAs are going to go up three times from INR 56400 Crore to more than 1.9 lakh Crore. The total net profit of top 18 banks in March 2009 comes out to be about INR 35000 Crore. As per ARCIL, the recovery rate or yield on NPAs is generally 15% but that too average. In bad times it might be less. So 85% of INR 1.9 lakh Crore comes to about INR 1.6 lakh Crore, which is more than 5 years of profits of all the banks. God helps RBI in 2010-2011.
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1 comment:

RK said...

A couple of months ago banking stocks were getting hammered because of rising NPA concerns but now, in a matter of weeks, NPAs does not seem to be concern at all or its just the retail investors getting carried away!


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