NPAs rise in foreign and private banks in India, says RBI report

Over the past two years, Indian banks across the segments?public, private and foreign? have witnessed a rise in their business per employee, profit per employee, deposits, advances and investments. While these banks have also seen a rise in their cost of funds and return on assets, there has been some marginal increase in the net non-performing assets (NPA), especially for foreign and private banks.

Analysts have pointed out that with delinquencies on a rise, NPAs in the banking system are bound to increase, as interest rates are heading upwards. For instance, the average net NPAs for foreign banks have inched up from 0.73% in 2006-07 to 0.78% in 2007-08. However, for nationalised banks, excluding SBI and its associates, net NPAs have come down from 0.92% to 0.77%, during the same period. Other SCBs including ICICI Bank and HDFC Bank have posted a marginal rise in their net NPAs from 0.97% to 1.09%, said RBI.

Citibank has seen an increase in its net NPAs from 0.95% in 2005-06 to 1.02% in 2006-07. It has gone up to 1.23% in 2007-08, which shows a substantial rise over the years. Deutsche Bank NPAs have risen marginally from a ?zero? per cent in 2005-06 to 0.01% in 2006-07 and 0.22% in 2007-08.

While most foreign banks have shown a rise in their net NPAs, Standard Chartered Bank has been able to improve its delinquency rate, during the same period.

According to RBI data, SCB?s net NPAs have dropped from 1.57% in 2005-06 to 1.43% in 2006-07. It further fell to 1.04% in 2007-08.

Data released by RBI on Wednesday showed the profile of banks in India, pointed out foreign bank deposits (average of 29 banks) have grown from Rs 5,198 crore in 2006-07 to Rs 6,826 crore in 2007-08. At the same time, average advances have also increased from Rs 4,357 crore to Rs 5,755 crore, during the same period.

Nationalised bank average deposits of 20 banks have grown from Rs 68,036 crore to Rs 84,000 crore, while other SCBs, namely private sector banks too have witnessed an average rise in their deposits from Rs 22,079 crore to Rs 29,351 crore, during the same period.

Average advances for public sector banks have increased from Rs 47,894 crore to Rs 60,189 crore, showed RBI data. At the same time, for private banks, the average advances have gone up from Rs 16,590 crore (average of 25 banks) to Rs 22,539 crore (average of 23 banks) in 2007-08.

Average profit per employee for foreign banks also shows an up tick as it has gone up from Rs 16.13 lakh to Rs 19.97 lakh in 2007-08. For private banks, the average profit per employee is up from Rs 4.65 lakh to Rs 5.72 lakh, during the same period. For nationalised banks, excluding SBI and its associates, the average profit per employee has gone up from Rs 2.87 lakh to Rs 3.77 lakh.