Even new generation private sector banks are showing asset quality deterioration in stressed sectors.
In April last year, Axis Bank came out with a ‘watch list’ of ₹22,000 crore-plus stressed corporate loans, accounting for 15 per cent advances to companies. The bank, headed by Shikha Sharma, a former ICICI banker, admitted that 60 per cent of these loans would become non-performing assets, or NPAs, in the next two years. To the bank’s surprise, half turned into full-blown NPAs by the end of the first year itself, that is, by March 2017. The bank is now staring at further slippages as a bulk (almost 60 per cent) of the remaining loans in the list have been given to the battered power sector. Exposure to other troubled sectors such as steel, oil & gas and cement could create further problems.
Things have turned so bad at the new-generation private sector bank that it now has one of the highest gross NPAs among private sector banks (5.04 per cent). The bank’s gross NPAs, at ₹21,280 crore, are half its revenues for the year. It is not alone. Other private banks, such as ICICI Bank, have also seen a spurt in NPAs in the last few years. The culprit, in most cases, is these banks’ lending to core sectors, which have been in deep depression for the past few years. “Anybody (public or private sector bank) who has lent to the infrastructure sector has suffered,” says Abizer Diwanji, National Head (Financial Services), EY India.
Diese Geschichte stammt aus der May 21, 2017-Ausgabe von Business Today.
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Diese Geschichte stammt aus der May 21, 2017-Ausgabe von Business Today.
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