Defaults by home loan customers are on the rise. Non-performing assets (NPAs) in the housing loan...
Defaults by home loan customers are on the rise. Non-performing assets (NPAs) in the housing loan segment of public sector banks have shot up by over Rs 1,000 crore to around Rs 6,200 crore during the first six months of calendar 2014.
While the outstanding home loan amount has increased from Rs 3,75,000 crore to Rs 4,02,802 crore, registering a growth of 6.93 per cent, non-performing assets (NPAs) in the segment have increased from 1.38 per cent to 1.54 per cent of advances in September, according to data compiled by the finance ministry.
NPAs of 17 banks increased in the latest six-month period. Syndicate Bank’s home loan NPAs rose from 3.7 per cent to 5 per cent of its home loan outstanding of Rs 9,592 crore. UCO Bank’s NPAs rose from 3.2 per cent to 5.5 per cent, the loans outstanding being Rs 9,693 crore.
As much as 6 per cent of Punjab & Sind Bank home loans has turned bad during the period under review.
However, Allahabad Bank, Bank of India, Bank of Baroda, Central Bank of India, Union Bank of India and United Bank of India have shown an improvement by way of reduction in home loan NPAs from the previous year, the ministry note said.
The NPA rise was witnessed in public sector banks while HDFC, the leading private player in the housing finance segment, showed a marginal decline in bad loans.
HDFC’s gross NPAs as of September 2014 stood at 0.69 per cent of the loan portfolio, down from 0.79 per cent a year ago.
However, State Bank of India, the largest home loan player, has managed to retain its NPA level at 0.9 per cent. It has extended home loans worth Rs 13,193 crore during the six months ended September 2014 and its total outstandings have reached Rs 148,502 crore. Home loan NPAs of IDBI Bank, the second largest PSU player in the segment, have gone up marginally to 1.0 per cent of its advances of Rs 24,803 crore.
“The first half of the fiscal witnessed a slow GDP growth. Rising inflation and high borrowing costs could have added to delinquencies in the home loan segment. While inflation increased, the slow growth in income levels and job creation played their part in higher NPAs,” said an official of a public sector bank.
Among other state-owned players, Canara Bank saw its home loan NPAs rising from 2.1 per cent to 2.5 per cent of gross home loan advances, while Andhra Bank saw NPAs rise from 2 per cent to 2.5 per cent and Indian Overseas Bank from 2.8 per cent to 3.1 per cent.