The Telegraph
Sunday , March 9 , 2014
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Bad asset sale on SBI agenda

Calcutta, March 8: The State Bank of India is considering selling a part of its bad assets to asset restructuring companies (ARCs) in the current quarter ending March.

“We are considering proposals to sell non-performing assets (NPAs). Depending on the opportunities we can sell some in the current quarter,” SBI chairman Arundhati Bhattacharya said here today on the sidelines of an event of the bank to celebrate International Women’s Day.

This will be the first time the country’s largest lender will be selling its NPAs, the gross amount of which touched Rs 67,799 crore for the quarter ended December, representing 5.73 per cent of its advances. On a quarter-on-quarter basis, the NPAs increased 5.17 per cent in the second quarter and 5.3 per cent in the third quarter of the current fiscal.

Lowering of bad assets is a major focus area for the bank, Bhattacharya said but declined to set a target by how much it wanted to pare bad loans.

According to Bhattacharya, an encouraging trend was the reduced stress on the power sector loans following the signing of fuel supply agreements (FSAs) between power producers and Coal India Ltd.

“We are seeing some turnaround in the power sector. After the FSAs in coal have been signed, we have seen some release of stress in the power sector.”

At the end of the December quarter, the bank had a total exposure of Rs 134,880 crore to the infrastructure segment, which includes power, road, ports, and telecom. The segment comprises 13.96 per cent of the total domestic advances of the bank.

Bhattacharya said the bank did not see fresh scope of lending to the power sector unless new projects came up.

Mid-sized companies and small and medium enterprises were the two major sectors where the bank witnessed increase in NPAs.

Bhattacharya today inaugurated an all-women bank of the SBI at Park Street.