Mumbai, Aug. 10: The top 12 banks in the country restructured assets worth Rs 32,530 crore during the three months ended June 30, taking the total restructured assets to around Rs 73,000 crore.

Last year, the RBI had allowed banks to restructure accounts to provide them some relief because of the economic slowdown. It had given them time till June 30. Under the scheme, companies have been either given more time to pay back their loans or have had interest rates on loans lowered for a short period.

Analysing the first quarter results of the banking sector, CARE Research today said the proportion of restructured assets to the total assets was still within a comfortable level of 4 per cent. However, variation was observed among individual banks while restructuring loans. Among them, public sector banks showed a higher percentage of restructured loans to total loans compared with private sector banks.

Among the 12 top banks, restructured assets as a percentage of the loan book as on June 30 was the highest in the case of IDBI Bank at 9.2 per cent. It was followed by Punjab National Bank, Central Bank of India, Union Bank, Bank of India, Syndicate Bank, State Bank of India and Bank of Baroda. HDFC Bank had the lowest proportion of restructured assets.

Although the RBI measure is seen as helping the banking system to keep bad loans in check, analysts have in the past voiced a concern that the restructured accounts may turn into non-performing assets (NPAs). It is understood that most of the accounts restructured belong to the corporate sector. Within this segment, small and medium enterprises account for a large portion of the restructured assets.

In its study, CARE said high treasury gains boosted the operating income of the 12 banks during the first quarter and net profit zoomed 55.2 per cent year-on-year. However, adjusted for treasury gains, net profit declined 8.1 per cent year-on-year and 25.4 per cent sequentially. Further, a decline in net interest margins due to lower lending rates and higher cost of funds led to lower net interest income growth.

According to CARE, provision for NPAs rose sharply but the overall provision was lower because of write-back of depreciation on investments.

Due to improvement in secondary markets, depreciation on investments (largely mutual funds and equity) was written back during the quarter, thus helping banks to lower the total provisioning cost.