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  1. How surging bad loans have forced banks to keep increasing provisions

How surging bad loans have forced banks to keep increasing provisions

In value terms, the NPAs of these 26 banks were Rs 7.31 lakh crore and have increased by Rs 2.5 lakh , says rorIn value terms, the NPAs of these 26 banks were Rs 7.31 lakh crore and have increased by Rs 2.5 lakh crore this year over March 2017,e this year over March 2017,

By: | Published: May 22, 2018 6:01 PM
The bad loans have surged for private banks as well in March 2018 after moderating in December 2017 compared to September 2017.

The rising NPAs have taken a toll on the balance sheets of banks in the country as they are being forced to provision more for the rising bad loans. A total of 26 banks have so far reported their financial results for the last quarter. For Bank of Baroda, Bank of India, IDBI Bank, Corporation Bank, IOB, United Bank, Andhra Bank in the PSB group and City Union, Dhanlaxmi, Karur Vysya, Laxmi Vilas and J & K in the private sector, the results are awaited. The gross NPAs continue to rise, CARE Ratings observation showed.

“After moderating from 9.04% in June 2017 to 8.93% in September 2017, the ratio has ascended subsequently to peak at 10.14% in March 2018. In value terms, the NPAs of these 26 banks were Rs 7.31 lakh crore and have increased by Rs 2.5 lakh crore this year over March 2017,” CARE Ratings observation says. The bad loans have surged for private banks as well in March 2018 after moderating in December 2017 compared to September 2017.

The NPA ratios for individual banks as of March 2018:

12 banks had Gross NPA ratio of above 10 percent and all are in the public sector.

5 banks had a ratio of less than 2 percent and 5 between 2-5 percent. All of them are private banks.

The balance 4 had a ratio of above 5 percent of which 2 are in the private sector and 2 in public.

“The total provisions made during the year (of which the most would be for NPAs) increased from Rs 43,611 crore to Rs 105,150 crore – an increase of 141%,” CARE Ratings observed.

SBI Q4 Results 2018

State Bank of India that is the bank by assets and third-largest by market capitalisation today reported a standalone net loss of Rs 7,718.17 crore for the quarter ended 31 March 2018. The bad loans have doubled as compared to same quarter 2017. In the history of SBI, this was the biggest-ever quarterly loss reported by the public sector lender.

On a sequential basis, SBI’s standalone net loss rose over threefold to Rs 7,718.17 crore as against a standalone net loss of Rs 2,416.37 crore in the October-December period of the financial year 2017-2018.

A standalone net profit of Rs 2,814.82 crore in the corresponding quarter of the financial year 2016-2017 was reported by the bank.

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