NPAs of private banks spurt

Written by Pradip Kumar Dey | Mumbai, May 23 | Updated: May 24 2008, 05:36am hrs
The net non-performing assets (NNPAs) of private sector banks in fiscal 2007-08 rose by 54% as against the 18.2% of public sector banks. A study of eight prominent players from the private sector and 24 PSBs shows that the average NNPAs to net advances ratio of PSBs increased from 0.93% in 2006-07 to 1.44% in 2007-08. However, in the case of private sector banks, the ratio declined from 1.09% to 0.75% during the period.

Harish Manon, ED, H-Zone Capital said: With the economic slow down hitting many industries, income levels have been impacted negatively. Private sector banks have always been more aggressive in selling personnel and credit card loans than PSBs.

In absolute terms, the NNPAs of 8 private sector banks increased from Rs 2,914 crore in 2006-07 to Rs 4,486 crore in 2007-08.The biggest lender from the private sector, ICICI Bank (75.2%) showed the highest growth in NNPAs, followed by HDFC Bank (47.1%). The NNPAs of ICICI Bank increased from Rs 1,992 crore in 2006-07 to Rs 3,390 crore in 2007-08.

In the case of 24 PSBs, the NNPAs increased from Rs 14,081 crore to Rs 16,640 crore. The highest increase in NNPAs was in the case of Oriental Bank of Commerce at 149.6% followed by Syndicate Bank (59.3 %). The countrys largest government bank, the State Bank of India (SBI) registered a growth of 41.21% in sticky loans during 2007-08.The NNPAs of SBI rose from Rs 5,258 crore in 2006-07 to Rs 7,424 crore in 2007-08.

Among private sector banks, ICICI Bank increased its NNPAs to net advances ratio from 1.02% in 2006-07 to 1.55% in 2007-08 and HDFC Bank from 0.43% to 0.50%.