8/10/2016

NPAsof11PSBsdoubledtoRs2.3Lcrin1yearprovisioningmadebottomlinesbleedTheEconomicTimes

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NPAsof11PSBsdoubledtoRs2.3Lcrin1year
provisioningmadebottomlinesbleed
PostaComment

ByAmitMudgill,ECONOMICTIMES.COM|Aug10,2016,02.47PMIST

NEWDELHI:First,itwasStateBankofTravancore.ThencameSBBJ,IOBandUnion
Bank.Thelistofpublicsectorbanksreportingquarterlylossesisjustgettingbiggerand
bigger.
SomePSUlendersreportedprofitsforthequarter,butthatcameinwithuptoan85percentdropintheirbottomlinesonayearonyear
basis.Allthankstoasharpriseinbadloans,whichdoubledtoRs2.28lakhcroreinaggregatefrommereRs1.09lakhcroreintheyear
agoquarterforthe11PSUbankswhichhavereportedtheirearningssofar.
ThebulgingNPAvolumeisinfact2.54timesbiggerthantheprevailingRs90,000croremarketcapofthese11lenders.
ThebankshadtomakeprovisionsworthRs13,400croreforQ1ofFY17againstRs7,293crorereportedfortheyearagoquarter,
accountingforanaggregatenetlossofRs1,574croreforthequarter.
ThesamesetofbankshadreportedRs3,204croreprofitforthecorrespondingquarterlastyear.
WhileitwasexpectedthatthesituationwouldimproveforPSUbanksafterthedisappointingQ4numbers,itseemsmorepainisinstore
forthePSUlenders.
IOB'snumbersweremostalarming.Grossnonperformingassets(GNPAs)ofthebankstoodatRs33,913crore,6.54timesthetotal
marketcapitalisationofthelender.Inpercentageterms,itwas20.48percentoftotalgrossadvances.
ThebanksetasideRs2,137croretowardsprovisionsandreportedalossofRs1,450croreforthequarter.UCOBankreportedanetloss
ofRs440croreaftermakingprovisionsofRs1,250croreforthequarter.GNPAsofthebankstoodat17.19percentattheendoffirst
quarter.
SBT'sQ1lossstoodatRs742crore,ledbyhigherprovisioning.PNB(17.19percent),AndhraBank(10.30percent)andUnionbank
10.16percent)weresomeoftheotherPSBswhoseGNPAswereinexcessof10percentofgrossadvances.
Netinterestmargin(NIM),orthedifferencebetweeninterestearnedbybanksandinterestpaid,halvedto1.07percentforbanksreporting
profitscomparedwith2.25percentreportedfortheyearagoquarter.
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