Bad loans are turning nightmarish for Indian banks. A steep rise in interest rates over the past 18 months has led to a sharp increase in non-performing assets.
Non-performing assets, or NPAs, are assets which are categorised by a bank or a financial institution as sub-standard, doubtful or loss assets as they do not yield any returns to them.
The Reserve Bank of India has increased its lending (repo) rate 13 times since March, 2010 to tame inflation.
Moody's has assigned Baa3, the lowest investment grading rating, to India. The rating agency downgraded the outlook for the Indian banking system to 'negative' from 'stable' saying that economic slowdown would impact asset quality, capitalisation and profitability.
However, Standard & Poor's upgraded the Indian banking sector saying its domestic regulations are in line with international standards and said the Reserve Bank has a moderately successful track record.
The gross non-performing assets (NPAs) of 37 listed banks has gone up to Rs 1.06 lakh crore (Rs 1.06 trillion) during the September quarter from Rs 79,078 crore (Rs 790.78 billion) in the corresponding period last year.
The banks are also under pressure from loans outgoes to the sectors facing inordinate delays in execution of projects, raising concerns over the companies' ability to repay loans on time.
Loans given to mining, power and realty companies might become NPAs for the banking sector due to the delay in completion of projects.
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Indian banks with highest NPAs
1. State Bank of India
Net NPAs: Rs 12,347.90 crore
Gross NPAs: Rs 25,326.29 crore
The gross non-performing assets (NPAs) of public sector banks increased by 20 per cent during June-September 2011.
Standard & Poor's, which had in September downgraded standalone ratings of State Bank of India, said high credit risks in the Indian banking sector reflects that the country has a weak payment culture and legal system that often result in low recoveries and delayed settlement of foreclosures.
(NPA figures are for the year ended March 2011, Source: RBI)
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Indian banks with highest NPAs
2. ICICI Bank
Net NPAs: Rs 2,407.36 crore
Gross NPAs: Rs 10,034.26 crore
ICICI Bank has the highest NPAs among private sector banks. ICICI Bank has slightly improved its net bad debts to 0.90 per cent from 0.91 per cent in the earlier quarter.
Indian banks face challenges like increase in interest rates on saving deposits, a tighter monetary policy, restructured loan accounts and increasing infrastructure loans.
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Indian banks with highest NPAs
3. Canara Bank
Net NPAs: Rs 2,347.33 crore
Gross NPAs: Rs 3,089.21 crore
Canara Bank's gross NPA ratio increased to 1.73 per cent (Rs 3,793 crore) for the quarter ending September 30 from 1.49 per cent (Rs 2,636 crore) in the year-ago period. The net NPA ratio stood at 1.43 per cent (Rs 3,117 crore) in September.
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Indian banks with highest NPAs
4. Punjab National Bank
Net NPAs: Rs 2,038.63 crore
Gross NPAs: Rs 4,379.39 crore
The NPAs of Punjab National Bank (PNB) rose by 29 per cent during the July-September quarter to Rs 5,150 crore.
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Indian banks with highest NPAs
5. Bank of India
Net NPAs: Rs 1944.99 crore
Gross NPAs: Rs 4,811.55 crore
The bank's gross non-performing assets (npas) stood at 3.02 per cent, up 33 basis points sequentially, while net NPAs stood at 1.98 per cent, up 71 basis points sequentially.
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Indian banks with highest NPAs
6. UCO Bank
Net NPAs: Rs 1,824.55 crore
Gross NPAs: Rs 3,150.36 crore
As NPAs mount, UCO Bank is eyeing a 20 per cent growth in its business and a reduction in its non-performing assets (NPAs) to less than 3 per cent in FY12.
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Indian banks with highest NPAs
7. Union Bank of India
Net NPAs: Rs 1,803.44 crore
Gross NPAs: Rs 3,622.82 crore
The system based NPA recognition method has led to a rise NPAs. Compared to the manual method, the system based study gives an accurate picture of bad loans.
However, the Union Bank is optimistic about cutting down NPAs. It expects gross NPAs to be below 3 per cent in the coming quarter.
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Indian banks with highest NPAs
8. IDBI Bank
Net NPAs: Rs 1,677.91 crore
Gross NPAs: Rs 2,784.73 crore
While IDBI's gross NPA rose to 2.47 per cent from 1.88 per cent, net NPA shot up to 1.57 from 1.19 per cent in the second quarter.
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Indian banks with highest NPAs
9. Indian Overseas Bank
Net NPAs: Rs 1,328.42 crore
Gross NPAs: Rs 3,089.59 crore
The gross NPA stood at Rs 3,090 crore in March 2011, as against Rs 3,611 crore in March 2010.
In percentage terms, the gross NPA ratio was 2.72 per cent as on March 2011 compared to 4.47 per cent in March 2010.
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Indian banks with highest NPAs
10. Syndicate Bank
Net NPAs: Rs 1,030.84 crore
Gross NPAs: Rs 2,598.97 crore
While the net non-performing assets (NPAs) increased to Rs 1,052 crore for the second quarter ended September, as against Rs 917 crore in the year-ago period, the percentage of net NPA declined marginally to 0.93 per cent, as against 0.97 per cent in the same period last year.
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Indian banks with highest NPAs
11. Oriental Bank of Commerce
Net NPAs: Rs 938.15 crore
Gross NPAs: Rs 1,920.54 crore
Oriental Bank of Commerce saw more than 50 per cent rise in NPAs in the September quarter.
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Indian banks with highest NPAs
12. Central Bank of India
Net NPAs: Rs 847 crore
Gross NPAs: Rs 2,394 crore
In the July-September quarter, the bank's gross non-performing assets (NPA) as a percentage of total advances rose to 2.94 per cent from 2.28 per cent in the same quarter a year ago.
Its net NPAs rose to 1.37 per cent of total loans from 0.68 per cent in the year-ago period.
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Indian banks with highest NPAs
13. Bank of Baroda
Net NPAs: Rs 790.88 crore
Gross NPAs: Rs 3,152.50 crore
The Bank succeeded in restricting its incremental delinquency ratio to 1.09 per cent, gross NPAs to 1.36 per cent and net NPAs to 0.35 per cent during 2010-11.
The Bank's Loan Loss Coverage Ratio (including technical write-offs) too stood at the healthy level of 85 per cent as on 31st March 2011.
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Indian banks with highest NPAs
14. United Bank of India
Net NPAs: Rs 757.41 crore
Gross NPAs: Rs 1,355.78 crore
United Bank of India has introduced a system of monitoring the collection of NPA and collecting information all branches.
It has also recruited more recovery agents for faster recovery of NPAs.
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Indian banks with highest NPAs
15. Vijaya Bank
Net NPAs: Rs 741.16 crore
Gross NPAs: Rs 1,355.78 crore
Banks have been witnessing substantial bad loans in the agricultural sector.
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Indian banks with highest NPAs
16. Allahabad Bank
Net NPAs: Rs 736.37 cr
Gross NPAs: Rs 1,647.92 cr
A large portion of the NPAs are from agriculture and SME sector. The bank is hopeful of a fast recovery in the next six months.
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Indian banks with highest NPAs
17. State Bank of Patiala
Net NPAs: Rs 620.77 crore
Gross NPAs: Rs 1,381.68 crore
The business of State Bank of Patiala has grown manifold since its establishment. There are more than 1000 branches of SBP.
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Indian banks with highest NPAs
18. Bank of Maharashtra
Net NPAs: Rs 618. 95 crore
Gross NPAs: Rs 1,173.70 crore
Bank of Maharashtra is now taking fresh initiatives to further bring it down to 2 per cent this fiscal.
From Rs 1,468 crore in September 2010, the gross NPA of the bank was slashed to Rs 1,174 crore as on March 31, 2011.
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Indian banks with highest NPAs
19. State Bank of Hyderabad
Net NPAs: Rs 562.72 crore
Gross NPAs: Rs 1,150.45 crore
State Bank of Hyderabad's fiscal second quarter (July-September) net profit fell 12.27% to Rs 232 crore from Rs 264 crore in the same period a year ago due to high interest expenditure and increased provisioning for bad loans.
Net NPAs of the bank during the quarter rose to 1.92% as against 0.64% in the same period last fiscal year.
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Indian banks with highest NPAs
20. Dena Bank
Net NPAs: Rs 54.89 crore
Gross NPAs: Rs 842.24 crore
The bank expects to have a net non-performing asset (NPA) ratio of 1.6 per cent to 1.7 per cent for FY11.
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