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Net non-performing assets or bad loans of 39 listed banks inched up just 0.8 percent or Rs 750 crore in the fourth quarter of 2012-13 according to a study. However, it does not signify any improvement in bank credit quality.
Net non-performing assets (NPAs) or bad loans of 39 listed banks inched up just 0.8 percent or Rs 750 crore in the fourth quarter of 2012-13 according to a study done by NPAsource.com, an Ahmedabad-based firm dealing in bank NPAs.
However, this does not signify any improvement in credit quality, which banks have been battling with since last couple of years. This was only due to higher loan provisions. Net NPAs are derived at after deducting loan provisions from gross NPAs.
"Banks are actually booking loan losses against provisions," Devendra Jain, CMD at Atishya Group owned NPAsources.com told moneycontrol.com.
"Typically, this happens in the last quarter of a financial year. Wherever lenders find bleak chances of repayments, they set off such losses against loan provisions. If provisions go up, net NPAs will come down. Those bad loans came across sectors like textile, power and others. Several defaulting small accounts too have collectively added to higher chunk of bad loans," he said.
Among top lenders, the State Bank of India (SBI) reported 13.5 percent quarter-on-quarter drop in net NPAs to Rs 25,370 crore. This was followed by HDFC Bank , the second largest private sector lender that recorded a fall in of 5.4 percent in net NPAs at Rs 496 crore. Punjab National Bank (PNB) saw a 4.6 percent sequential dip in net NPAs at Rs 7,586 crore, according to data complied by NPAsources.com.
Besides, IDBI Bank net NPAs slipped 6 percent to Rs 3,303 crore while Corporation Bank 's net NPAs shrank 16.9 percent to Rs 1,698 crore during the same period. Central Bank of India reported 14.9 percent fall in net NPAs at Rs 5,864 crore.
Five banks including SBI, Central Bank, PNB, Corporation Bank and IDBI Bank accounted for more than Rs 5,100 crore drop in net NPAs.
In a universe of 39 banks, Yes Bank 's net NPAs plummeted sharply by 55.1 percent quarter-on-quarter to Rs 16 crore. The second ranked bank was ING Vysya Bank wherein net NPAs slipped 42.9 percent to Rs 16 crore. Bank of Maharashtra showed a shrinkage of 19.3 percent at Rs 487 crore.
During the three month period, ICICI Bank recorded a marginal rise of 2.2 percent q-o-q to Rs 2,182 crore. For Axis Bank , net NPAs rose by 3.7 percent to Rs 679 crore. This however, suggests, provisions were less.
According to NPAsource.com study, gross NPAs of 39 banks stood at Rs 1,79,431 crore as on March 31, 2013, as against Rs 1,78, 544 crore a year back, implying rise of Rs 887 crore during the fourth quarter. In 2012-13, gross NPAs of these 39 banks rose by 36.1 percent, while net NPAs rose by 51.2 percent.
SBI stock price
On April 16, 2014, State Bank of India closed at Rs 1959.75, down Rs 3.75, or 0.19 percent. The 52-week high of the share was Rs 2469.25 and the 52-week low was Rs 1452.90.
The company's trailing 12-month (TTM) EPS was at Rs 149.34 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 13.12. The latest book value of the company is Rs 1325.34 per share. At current value, the price-to-book value of the company is 1.48.
READ MORE ON State Bank of India, HDFC Bank, Punjab National Bank, PNB, NPAs, non-performing assets , IDBI Bank , Corporation Bank, Central Bank of India, Yes Bank, ING Vysya Bank, Bank of Maharashtra, ICICI Bank, Axis Bank, Allahabad Bank, State Bank of Mysore, NPAsource.com , credit quality, higher loan provisions
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