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Even though the gross non-performing assets (<keyword id="710979" type="General" weightage="80" keywordseo="gnpa" source="Orion">GNPA</keyword>) of scheduled commercial banks in <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword> has hit a six year low of 5.9 per cent in FY22, it can improve further, said <keyword id="6431877" type="General" weightage="100" keywordseo="care-ratings" source="Orion">CARE Ratings</keyword> in a report. According to the credit rating agency, the GNPA of Indian banks at the end of FY22 was at 5.9 per cent and the overall provision coverage ratio (PCR) went up to 70.9 per cent. "As the Indian economy has navigated the pandemic-induced shocks, the <keyword id="6355272" type="General" weightage="20" keywordseo="bank" source="Orion">bank</keyword> credit growth by scheduled commercial banks (SCBs) improved post-August 2021 to reach 13.1 per cent in early June 2022, a rate last recorded in March 2019," the report said. Apart from retail, the major driver of this growth has been the wholesale credit, which reported double digit growth after witnessing a significant slowdown last year. According to CARE Ratings, the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'s (<keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword>) <keyword id="678734" type="General" weightage="50" keywordseo="financial-stability-report" source="Orion">Financial Stability Report</keyword> released on June 30 presents a rather satisfactory picture of the Indian banking system and the GNPA ratio is one of the most important indicators to check the health of the banking system. The GNPA ratio of SCBs had been on a downward trajectory since March 2019, owing to recoveries and higher write-offs by multiple banks and one time restructuring (OTR) scheme announced by RBI. As per the stress tests conducted by RBI, the SCBs GNPA ratio could improve from 5.9 per cent in March 2022 to 5.3 per cent by March 2023 under the baseline scenario driven by higher bank credit growth and a declining trend in the stock of GNPAs. "However, the GNPA ratio may rise under the medium/severe stress scenarios, the GNPA ratio may rise to 6.2 per cent/ 8.3 per cent, respectively," CARE Ratings said. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/adani-enterprises-adani-ports-and-adani-total-gas-are-going-ex-dividend-on-july-14-should-you-buy-them/articleshow/92823532.cms">These three Adani stocks are going ex-dividend on July 14 – should you buy them?</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/after-techies-its-aviation-crew-salaries-thatll-be-up-in-the-air/articleshow/92818738.cms">After techies, its aviation crew salaries that’ll be ‘up in the air’</a>

Banks' non performing assets hit a six year low, says CARE Ratings

The bad assets or gross <keyword id="19964545" type="General" weightage="20" keywordseo="NPAs" source="keywords">NPAs</keyword> of commercial <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword> fell to a 12-year low of 2.8% in March 2024 and may go down further to 2.5% by the end of the current fiscal, said the <keyword id="19899808" type="General" weightage="100" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="269" meta.entityid="RBI">RBI</keyword>'s <keyword id="678734" type="General" weightage="20" keywordseo="Financial-Stability-Report" source="Orion">Financial Stability Report</keyword> (FSR) released on Thursday. <keyword id="19982351" type="General" weightage="20" keywordseo="Scheduled-Commercial-Banks" source="keywords" meta.keywordsubtype="org" meta.entityname="Scheduled Commercial Banks" meta.hostid="269" meta.entityid="Scheduled Commercial Banks">Scheduled Commercial Banks</keyword>' (SCBs) gross <keyword id="6401657" type="General" weightage="20" keywordseo="non-performing-assets" source="Orion">non-performing assets</keyword> (<keyword id="19982350" type="General" weightage="20" keywordseo="GNPA" source="keywords">GNPA</keyword>) ratio fell to 2.8%, and the net non-performing assets (NNPA) ratio to 0.6% at the end of March 2024. "The asset quality of SCBs recorded sustained improvement, and their GNPA ratio moderated to a 12-year low in March 2024. Their NNPA ratio too improved to a record low," said the June FSR. Among bank groups, public sector banks (<keyword id="20012926" type="General" weightage="20" keywordseo="PSBs" source="keywords">PSBs</keyword>) recorded a substantial reduction (76 bps) in their GNPA ratio during H2 2023-24. While the GNPA stock decreased across all bank groups, active and deep provisioning by PSBs and foreign banks (FBs) resulted in an improved provisioning coverage ratio (PCR) in March 2024, the report said. The half-yearly slippage ratio (viz, new NPA accretions as a share of standard advances) decreased across bank groups. Though the amount of write-offs declined during the year, the write-off ratio remained almost at the same level a year ago due to a reduction in GNPA stock, the FSR said. Overall, it added the sustained reduction in the GNPA ratio since March 2020 has been primarily due to a persistent fall in new NPA accretions and increased write-offs. The RBI said macro stress tests are performed to assess the resilience of SCBs' balance sheets to unforeseen shocks emanating from the macroeconomic environment. These tests attempt to assess capital ratios over a one-year horizon under a baseline and two adverse (medium and severe) scenarios. "The GNPA ratio of all SCBs may improve to 2.5% by March 2025 under the baseline scenario," the report said. However, if the macroeconomic environment worsens to a severe stress scenario, the ratio may rise to 3.4%. Under the severe stress scenario, the GNPA ratios of PSBs may increase from 3.7% in March 2024 to 4.1% in March 2025, whereas it may go up from 1.8% to 2.8% for private sector banks and from 1.2% to 1.3% for FBs. The <keyword id="20089808" type="General" weightage="20" keywordseo="financial-stability" source="keywords">Financial Stability</keyword> Report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the Indian financial system and risks to financial stability. The report further said deposit mobilisation by SCBs gathered pace during 2023-24, with a large portion of new accretions in the form of term deposits. "Interest rates became more attractive as banks stepped up efforts to mobilise funds to match the rapid rise in credit demand. Growth in current account and savings account (CASA) accelerated across all bank groups," the RBI said. According to the report, bank credit accelerated during H2 2023-24 among public sector banks (PSBs) and foreign banks (FBs), whereas it moderated in respect of private sector banks (PVBs). The share of credit to the services sector and personal loans in the aggregate loan portfolio increased. Personal loans accounted for over half of PVBs' <keyword id="19998083" type="General" weightage="20" keywordseo="credit-growth" source="keywords">credit growth</keyword>. The expansion in personal loans was broad-based, led by housing loans and followed by other personal loans.

Banks' gross NPAs at 12-yr low, may fall further to 2.5%: RBI report

Mumbai, Dec 27 () The gross non-performing asset ratio of banks may increase to 9.9 per cent by September 2020 from 9.3 per cent in September 2019, according to an RBI report.
 The gross NPA ratio of banks stood at 9.3 per cent in March 2019.
 "The stress tests indicate that under the baseline scenario, the GNPA ratios of banks may increase to 9.9 per cent by September 2020, due to change in macroeconomic scenario, marginal increase in slippages and the denominator effect of declining credit growth," RBI said in its Financial Stability Report (FSR).
 The report said state-run banks' GNPA ratios may increase to 13.2 per cent by September 2020 from 12.7 per cent in September 2019, whereas for private banks it may climb to 4.2 per cent from 3.9 per cent, under the stress scenario.
 The foreign banks' gross bad loans may increase to 3.1 per cent from 2.9 per cent in September 2019.
 The report said banks net non-performing assets (NNPA) ratio declined in September 2019 to 3.7 per cent, reflecting increased provisioning.
 The aggregate provision coverage ratio (PCR) of all banks rose to 61.5 per cent in September 2019 from 60.5 per cent in March 2019.
 PCRs of both state-run banks and private banks increased in September 2019.
 "Following the recapitalisation of state-run by the government, banks capital to risk-weighted assets ratio (CRAR) improved to 15.1 per cent in September 2019 from 14.3 per cent in March 2019," the report said.
 The state-run banks' CRAR improved to 13.5 per cent from 12.2 per cent during the same period.
 Bank-wise distribution of asset quality showed that while 24 banks had GNPA ratios of under 5 per cent, four banks had GNPA ratios higher than 20 per cent in September 2019.
 The asset quality of agriculture and services sectors, as measured by their GNPA ratios, deteriorated to 10.1 per cent in September 2019 as compared to around 8 per cent in March 2019.
 For the industry sector, the slippages during the period declined to 3.79 per cent from around 5 per cent in March 2019.
 The report showed that the share of large borrowers in banks' total loan portfolios and their share in GNPAs was at 51.8 per cent and 79.3 per cent, respectively, in September 2019, lower compared to the 53 per cent and 82.2 per cent, respectively in March 2019.
 The top 100 large borrowers accounted for 16.4 per cent of banks' gross advances and 16.3 per cent of GNPAs. HV ABM
ABM

Banks' gross NPA ratios may rise to 9.9 pc by Sept 2020: RBI

Mumbai, Dec 24 () The non-banking financial company (NBFC) sector, which has been affected by a series of default by IL&amp;FS, reported a sharp jump in gross non-performing assets ratio to 6.1 per cent in FY19 from 5.3 per cent in FY18, says an RBI report.
The net NPA ratio saw a marginal uptick at 3.4 per cent in the fiscal ended March 2019, compared to 3.3 per cent in FY18.
In its report on Trends and Progress 2018-19, the Reserve Bank of India said in FY20, up to September, asset quality of the sector showed deterioration with a slight increase in gross non-performing asset (GNPA) ratio.
However, it did not disclose of the September NPA ratio.
The report said in 2018-19, GNPA ratio of non-deposit NBFCs deteriorated to 6.1 per cent from 5.3 per cent in FY18.
The net NPA ratio for NBFCs-ND-SI edged up marginally, reflecting the maintenance of adequate buffers, especially by microfinance institutions (MFIs) and Infrastructure Finance Companies (IFC).
NBFCs-MFI, however, reported a significant improvement in the GNPA ratio at 4.3 per cent in FY19 compared to 7.5 per cent.
"The improvement in the GNPA ratio of the NBFCs-MFI may be attributed to write offs of aging loans," the report said.
In the case of deposit taking NBFCs, gross NPAs declined to 5.3 per cent in FY19 to 6.1 per cent in FY18.
The report said although the NBFC sector grew in size to Rs 30.9 lakh crore in FY19 from Rs 26.2 lakh crore in FY18, the pace of expansion was lower than in FY18, mainly due to rating downgrades and liquidity stress in a few large NBFCs in the aftermath of the IL&amp;FS event.
Despite liquidity stress faced by the sector, there was expansion in asset size of IFCs.
Balance-sheets of NBFCs-MFI also expanded on the back of strong growth in their loans and advances, especially to the agriculture sector.
In 2018-19, credit extended by NBFCs continued to grow, the report said adding, "industry is the largest recipient of credit provided by the NBFC sector, followed by retail loans and services". HV RUJ BAL
BAL

NBFCs NPA ratio jumps to 6.1 pc: RBI

Mumbai, Jan 9 () Amid a slowdown in economic activity, state-owned Sidbi on Thursday said credit supply growth to the commercial sector has slowed to a multi-year low of 8.1 per cent for the 12 months ended September 2019.
 The data, put together in association with credit information company TransUnion Cibil, comes at a time when economic growth is estimated to slow to a decadal low of 5 per cent for 2019-20 and overall credit growth has slipped to 7.1 per cent for 2019.
 The total outstanding credit of the commercial sector was Rs 65 lakh crore in the year ended September 2019, up 8.1 per cent, a multi-year low growth, as against 16.2 per cent in the year to December 2018, the quarterly report said.
 "The industry-level credit exposure trends are driven by either growth or slowdown in fresh loan disbursals, changes in utilisation levels of existing limits or changes in the percentage of exits of existing limits," Cibil Managing Director and Chief Executive Officer Satish Pillai said.
 As the growth in the denominator goes down, there has been an improvement in the asset quality with the gross non-performing assets (GNPA) ratio for the commercial segment improving to 16.8 per cent in the year ended September 2019 as against 17 per cent a year ago, the report said.
 It also added that the trend of an increase in share for the private banks continued at the expense of the capital-starved state-run lenders.
 The share of private banks in the overall commercial credit stands at 38.9 per cent, up from 36.3 per cent in the year-ago period, while the same for state-owned lenders has come down to 48.2 per cent from 51.2 per cent, it said.
 Surprisingly, the troubled non-bank lending segment seems to be holding or even growing on to its shared which stood at 12.8 per cent as against 12.5 per cent in the year-ago period, the report said.
 From an asset quality perspective, the medium sized businesses are the most problematic for the system with state-run lenders posting a GNPA of 29.3 per cent, NBFCs 8.1 per cent and the leaner private sector banks 6.1 per cent.
 The report said lending to micro, small and medium enterprises has increased for smaller borrowing size and lower duration borrowers, it said. AA HRS

Credit supply to commercial sector slows to multi-year low of 8.1 pc: Sidbi

New Delhi, Feb 12 () Microfinance lender Satin Creditcare Network on Wednesday reported a 35 per cent decline in consolidated net profit at Rs 46.71 crore during the third quarter ended December. The company had posted a net profit of Rs 71.41 crore in the year-ago quarter, Satin Creditcare said in a regulatory filing. Total income during October-December fell to Rs 374.60 crore as against Rs 400.07 crore in the same quarter of 2018-19. Gross non-performing assets (GNPA) at an AUM (assets under management) level stood at 3.1 per cent as on December 31, 2019 as compared with 3.2 per cent as on December 31, 2018, improvement of 10 basis points, it said. "Some parts of the country faced issues as they were recovering from floods while many parts of the country were disrupted due to unrest and nationwide protests," Satin Creditcare Chairman and MD HP Singh said. "Also, concerns in few districts of Assam have compelled us to adopt a cautious approach in the state which has affected our operations to certain extent," he added. Shares of Satin Creditcare on Wednesday closed 0.11 per cent higher at Rs 219.50 on the BSE. KPM RVK

Satin Creditcare Q3 net falls 35 pc to Rs 47 cr

Mumbai, Apr 18 () Despite expecting challenges to the Indian banking system because of the COVID-19 pandemic, global ratings agency Standard and Poor's feels HDFC Bank will be resilient and said that the country's sovereign rating restricts it from upgrading the country's largest private sector lender. It appreciated HDFC Bank's comfortable capitalisation, strong earnings, regular capital raising to fund above-average growth and the "best" asset quality in the system. The bank reported an 18 per cent increase in the March quarter to Rs 6,928 crore after provisioning Rs 1,550 crore for the impact of COVID-19 and losing Rs 450 crore in income due to the lockdown. Its asset quality also improved over the previous quarter with the gross non-performing asset (GNPA) ratio at 1.26 per cent. "The rating on HDFC Bank is capped by our sovereign credit rating on India (BBB-/Stable/A-3). The rating on the bank will therefore move in tandem with that on the sovereign," the rating agency said in a note. "We would raise our rating on HDFC Bank if we upgrade the sovereign," it added. They added that the agency does not rate Indian banks above the sovereign because of the direct and indirect influence that a sovereign has on banks operating in the country. S&amp;P feels Kotak Mahindra Bank will be the other lender that will be able to withstand difficulties on the asset quality during the challenging period. It expects the government to step in with support to the state-run lenders in case they experience any difficulties. AA HRS

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Banks' non performing assets hit a six year low, says CARE Ratings

IANS

Banks' gross NPAs at 12-yr low, may fall further to 2.5%: RBI report

PTI

Banks' gross NPA ratios may rise to 9.9 pc by Sept 2020: RBI

PTI

NBFCs NPA ratio jumps to 6.1 pc: RBI

PTI

Credit supply to commercial sector slows to multi-year low of 8.1 pc: Sidbi

PTI

Satin Creditcare Q3 net falls 35 pc to Rs 47 cr

PTI

India's sovereign rating restricting upgrade on HDFC Bank's ratings: S&P

PTI

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