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Bank health worsens

Mumbai, Feb. 18: Gross non-performing assets (NPAs) of 40 listed banks rose over 35 per cent, or Rs 63,386 crore, during the nine months ended December to cross the Rs 2.4-lakh-crore mark.

Bad assets had grown 27 per cent in the first half of the fiscal.

According to a study by NPAsource.com, 10 out of the 40 listed banks accounted for nearly 70 per cent of the total gross NPAs.

The State Bank of India had the largest share in the total gross NPAs at 28 per cent and Rs 67,799 crore. It was followed by Punjab National Bank with 7 per cent share at Rs 16,596 crore.

The Bank of Baroda and the Central Bank of India have a 5 per cent share each.

The Bank of Maharashtra posted the largest increase in gross NPAs of 209 per cent at Rs 3,516 crore from Rs 1,138 crore as of March 31, 2013. It was followed by the Calcutta-based United Bank of India, which reported a jump of 188 per cent at Rs 8,546 crore at end of the third quarter.

The asset quality of commercial banks has come under pressure because of the economic slowdown.

Bankers and experts point out that the current trend will continue till the economic growth improves.

However, banks are now aggressively focussing on recoveries and upgradations of stressed accounts.

“There is no respite for banks in India from the onslaught of higher interest rates and slowdown in the Indian economy leading to further increase in loans turning bad from corporate as well as retail segments,” D.K. Jain, chairman and managing director of Atishya Group, who owns NPAsource.com, said.

“The fourth quarter of 2013-14 will continue to be bad for banks on the NPA front, but most banks will resort to higher levels of provisioning to bring down their net NPA levels. The first quarter of the next financial year, too, will continue to be bad for banks with regard to NPAs,’’ he added.

Net NPAs of banks during the first nine months of this fiscal rose to 49 per cent from 38 per cent during the first six months of 2013-14.

 
 
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