NPA PROVISIONING
Indian banks are better placed with strong balance sheet, low NPAs and higher profits: CLSA
Indian banks have significantly strengthened their position after enduring government scrutiny and bad loan challenges, according to CLSA. Balance sheets are robust, with profits quadrupling in a decade, and return on equity is at its highest since FY2011. Deposit and loan growth has accelerated, with private banks poised for improved market performance.
Banks report higher NPA provisioning in Q4
For the 12 public sector banks (PSBs) in the sample, the aggregate provisioning for non-performing assets (NPA) fell by a tad 0.7% year-on-year to Rs 15,157.8 crore.
RBI says India's banking sector is sound and resilient, Gross NPA is below 3%
During the Monetary Policy announcement, RBI Governor Shaktikanta Das emphasized India's robust banking system, with gross NPA levels below 3% for scheduled commercial banks and NBFCs as of March 2024. He highlighted factors like improved provisioning, capital adequacy, and profitability, stressing the importance of governance, risk management, and compliance enhancements.
Legacy issues behind us, PNB on right path to outperform its competition: MD Atul Kumar Goel
PNB, led by Atul Kumar Goel, achieved a 229% profit growth to Rs 8,245 crore in FY24. Initiatives like reducing NPAs, improving ROA, and expanding branches contribute to the bank's success.
Greater transparency: No indemnity clause in NPA sale pact between banks and ARCs
High-street banks and stressed asset firms in Mumbai adopted a 'model agreement' for selling loans but couldn't agree on 'indemnity'. Lenders can declare an account 'fraud' post-sale to ARCs. The industry body approved the Model Assignment Agreement and Model Trust Deed for adoption by banks, financial institutions, finance companies, and ARCs.
How Jaipur-based AU Small Finance Bank plans to plug a $400 billion credit gap
India’s largest small finance bank has recently bulked up and is now looking to utilise its heft to increase its presence in MSME lending. How successful would it be, is the billion-dollar question.
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Chandra Shekhar Ghosh explains Bandhan Bank’s extra provisioning, opex issues and sees credit cost @1.5-1.8% next FY
Chandra Shekhar Ghosh, MD & CEO of Bandhan Bank, discusses the bank's expansion with 300 new branches and recruitment of 2,000 people. He covers topics such as slippage reduction, DPD improvement, collection efficiency, provisioning reasons, net profit dip, operating expenses, credit guarantee fund, net interest margins, asset quality, deposit rate impact, portfolio quality, and credit cost guidance.
Ujjivan Small Finance Bank becomes eligible for universal banking license, but has no immediate plan to seek one
The bank’s gross non-performing assets ratio stood below 3% and net NPA ratio below 1% for two consecutive years, making it entitled to apply for a licence. "Next week, the process of reverse merger will be over. A call on universal banking will be taken later. We are not rushing for it," managing director Ittira Davis said.
Bandhan Bank Q4 Results: Lender posts PAT at Rs 55 crore on higher provisions; NII at Rs 5,189 crore
The fall in profit after tax (PAT) could be attributed to higher provisions reported in Q4FY24 at Rs 1,774 crore compared to Rs 735 crore in Q4 FY23.
Karur Vysya Bank Q4 Results: Net profit jumps 35% YoY to Rs 456 crore
The bank's net interest income for the quarter improved 11.5% to Rs 996 crore while other income was 57% higher at Rs 629 crore. The net interest margin for the quarter, however, was at 4.19%, down 18 basis points from 4.37% a year ago.
Credit growth to be between 11-12% for next financial year: Atul Kumar Goel, PNB
For the current financial year 24-25, we have set a target of around 57% and remaining 43% will be the corporate advance because we are one of the largest bank of the country.
SBI Q4 net profit surges 24% to a record
Unlike last quarter, the bank did not have to make any provisions for revision of wages and pensions. The Mumbai-based bank has kept a ₹1,700-crore buffer for any future pension needs.
Capital Small Finance Bank Q4 Results: Lender reports net profit at Rs 28.2 crore
Capital Small Finance Bank on Thursday reported Rs 28.2 crore net profit for the March quarter against Rs 24.3 crore in the year-ago period, riding on lower provisions and contingencies.
RBI’s proposed project financing regulations not to impact REC profitability at all: CMD
Vivek Kumar Dewangan, CMD of REC, navigates through the intricate financial landscape, emphasizing strategic planning, regulatory compliance, and sustainable growth to propel REC towards a robust future in the evolving energy financing sector. Dewangan says: "In case, our capital gets reduced though the impact is not going to be much actually because we have a large cushion. We have the option of raising perpetual bonds. We can increase our tier I capital and tier II capital also can be increased by raising subordinate debt."
Esaf Small Finance Bank Q4 Results: Net profit plunges 57% YoY to Rs 43 crore
The bank's operating profit was 30% higher at Rs 285 crore against Rs 219 crore but provisions and contingencies at Rs 226 crore against Rs 82 crore pulled the net profit down.
Canara Bank Q4 Results: Profit jumps 18% YoY to Rs 3,757 crore; NII rises 11%
Canara Bank Q4 Results: The company's Board has also recommended a dividend of Rs 16.10 per share, 161% of face value each, for the financial year 2023-24
Monetary, prudential steps' tango helps cut home loan NPAs
Prudential measures like risk weights and loan-to-value adjustments, along with interest rates, will be more effective in repayments of loans. This will also help in housing credit growth and controlling the asset quality of banks' home loan portfolios, it shows.
REC Q4 Results: Net profit jumps 33% to to Rs 4,079 cr on core income, provision write-back
Infrastructure financier REC on Tuesday reported a 33 per cent rise in its consolidated net profit to Rs 4,079 crore in the March quarter, helped by a healthy growth in core income and a provision write-back.
Moving towards zero net NPA; will consider universal bank licence after 2-3 years: Utkarsh SFB CEO
Govind Singh, MD & CEO of Utkarsh SFB, discusses plans to transition to a universal bank, emphasizing positive quarterly performance, NPA targets, and regulatory evaluation for the transition in the next two to three years.
Public sector banks doing better in managing NPAs vis-a-vis their private counterparts: FICCI-IBA survey
A survey by FICCI and IBA reveals Indian public sector banks outperform private counterparts in managing non-performing assets (NPAs). Majority of public banks reported NPA reduction, contrasting with private banks. NPAs are expected to remain stable or decrease in coming months, with sectors like textiles, agriculture, and gems showing persistent issues.
Aggregate NPA provisioning for banks dips in Q3
After peaking at Rs 65,986.9 crore in the March 2021 quarter, these provisions have gradually cooled off since then. In the March 2023 quarter, they had dropped to Rs 17,956 crore, the lowest in five years, aided by a reversal in provisioning from IDBI Bank.
BoB Q3 net profit up 19%, fund costs hurt margins
Net interest income (NII), or the difference between the interest earned on loans and that paid for deposits, increased by 3% to ₹11,101 crore, mainly as interest expenses increased. Operating expenses also increased 12%, primarily on higher employee costs, denting profits.
Indian Overseas Bank posts 30% growth in net profit for December quarter
Chennai-based Indian Overseas Bank recorded a 40 percent growth in net profit for the quarter ended December 2023 on controlling non-performing loans and lower provisioning.
Karur Vysya Bank posts 43% jump in profit
Its net interest margin, a key profitability metric, was at 4.32% for the quarter, a tad lower than the 4.36% seen during the corresponding quarter of the previous year, due to the rise in the cost of funds. The cost of deposits rose by 99 basis points to 5.25% for the quarter.
IDBI Bank net profit rises 57% in Q3
IDBI Bank has reported a 57% increase in net profit to Rs 1,458 crore for the third quarter, with net interest income rising 17% to Rs 3,435 crore. The bank's net advances grew by 18% to Rs 1.75 lakh crore, aided by growth in the retail segment. Gross net performing assets were down to 4.69%, while provision coverage ratio improved to 99.17%.
J&K Bank confident of meeting guidance of 5% gross NPA; net NPA already below 1%: MD
Baldev Prakash says: Asset quality has been the biggest success story of the bank. If you see the numbers in the last two years, one-and-a-half years, you will see that consistently on a quarter-on-quarter basis, we have not only achieved our guidance, but surpassed that. As of today, we are already below 5% and our guidance is 4.5% on gross NPA.”
Karur Vysya net profit up 51% on lower provisions
Net interest income rose 11.5% at 915 crore. Its gross non-performing assets ratio improved to 1.73% at the end of September from 4.02% a year ago. Net NPA was 0.47% against 1.38%. Provision coverage ratio was at 94.49% as against 86.94% earlier.
NPA provisioning of banks increases sequentially in Q1 driven by select lenders
The number of banks in the sample which reported a sequential increase in the loan loss provisioning for the June quarter increased to 14 from 10 in the previous quarter. The sequential jump in the NPA provisioning was driven by the PSBs including State Bank of India and Bank of Baroda, and private sector banks such as Axis Bank and Kotak Mahindra Bank. Each of these banks reported more than two-fold increase sequentially in their respective NPA provisioning for the June quarter. Their share in the sample’s NPA provisioning increased to nearly 23% from 11% in the prior quarter.
IDFC First Bank Q1 results: PAT soars 61.3% YoY to Rs 765 crore, NII grows 36%
Provisions and contingencies for the quarter was Rs 476 crore, compared to Rs 308 crore a year ago. Gross non-performing assets (NPA) as a percentage of the total loans was 2.17% as of June end, compared to 3.36% a year ago, and 2.51% a quarter ago.
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