Stressed loans at PSBs balloon as economy slows
Punjab National Bank’s (PNB) exposure to sectors such as power continue to hurt; the bank’s gross non-performing assets (NPAs) jumped 40% sequentially to hit 4.66% of advances with the bank unable to to make too much headway on recoveries. The country’s second-largest lender restructured accounts worth Rs 2,770 crore. KR Kamath, CMD of PNB, blamed it on the state of the economy, saying “banks will not function in isolation” and that the general macroeconomic environment would be reflected in the bank’s performance.
Crisil estimates that the restructured assets of banks together with NPAs could cross 10% of advances by March next year; some banks have already hit that number.
Commentary from other bankers suggests the pain isn’t over yet and it could take a while for the NPA cycle to peak. N Seshadri, CMD of Bank of India (BoI) was candid in saying there was unlikely to be a tangible improvement in asset quality in the rest of the year. “You would have to be be naive to assume that there will be no further NPAs,” Seshadri said adding, however, that there may not be too much damage from here on. Bank
Be the first to comment.