The news on the banking sector's bad loan problem keeps getting worse. Earlier this week, reports pointed out that India's private banks have recorded a 450 per cent jump in gross NPAs in the past five years. But according to a recent CARE Ratings report, there has been a significant spurt in NPAs even on a quarterly basis where the fourth quarter results of the last fiscal are concerned.
So far, 26 banks, including the country's biggest lender the State Bank of India, have announced their Q4FY18 financial results. "After moderating from 9.04 per cent in June 2017 to 8.93 per cent in September 2017, the [Gross NPA] ratio has ascended subsequently to peak at 10.14 per cent in March 2018," said the report. In value terms, the NPAs of these 26 banks stood at Rs 7.31 lakh crore, up 15 per cent from the December quarter and more than Rs 2.5 lakh crore higher than in March 2017. Incidentally, the NPA figure is bigger than the figure earmarked for India's biggest ever highway development plan.
"In case of PSBs [public sector banks] the NPA rates were higher...while the ratio remained stable in the range of 11-12 per cent in the first three quarters of FY18, it has increased by 163 basis points in Q4 to 13.41 per cent," said the rating agency. The private lenders too showed a spike in NPA in the March quarter, up 19 per cent from the December quarter.
The NPA ratios for some leading banks as of March 2018 are as follows:
And, in case you are wondering, yes, there are banks that have fared far worse than the fraud-hit Punjab National Bank, which recently posted the biggest quarterly loss in India's banking history. Central Bank of India, for instance, had Gross NPA ratio of 21.48 per cent, while the figures for UCO Bank stood at 24.64 per cent and Dena Bank at 22.04 per cent. In fact, earlier this month the RBI tightened the leash around Dena Bank, which was already under the prompt corrective action plan, and barred it from further lending and recruitment.
The report also highlighted that the 12 banks boasting Gross NPA ratio of above 10 per cent were all in the public sector, while the 10 banks with a ratio of under 5 per cent were private banks. Of the remaining four banks that have declared their Q4 results, two private lenders and two PSBs had a ratio of over 5 per cent. "The total provisions made during the year (of which the most would be for NPAs) increased from Rs 43,611 crore to Rs 105,150 crore - an increase of 141 per cent," said the report.
Results are awaited for several more banks including Bank of Baroda, Bank of India, IDBI Bank, Corporation Bank, IOB, United Bank, Andhra Bank in the PSB group and City Union, Dhanlaxmi, Karur Vysya, Laxmi Vilas and J&K in the private sector.