Gross NPAs touched Rs. 2.9 lakh crore by March: ICRA
Investment Information and Credit Rating Agency (ICRA) warned the banking industry that it may suffer more shocks due to the pile up of its’ gross bad assets which is set to touch 4.4 %, or Rs 2.9 trillion of total assets by this fiscal end.
Gross bad assets were 4 % of total assets at the end of the July-September quarter. Net NPAs stood at 2 % or Rs 0.9 trillion in March and 2.7 per cent or in Q2 or Rs 1.25 trillion.
As per ICRA estimates, unamortized losses worth Rs. 6,000-7,000 crore would impact banks’ profitability in the second half of FY14. It also said that the banking system require Rs. 4.1-5.7 lakh crore by FY18 to meet the Basel III norms. It expects net profit of state-run banks this fiscal year to be 30-40 % lower than FY13, which will pull down their return on equity to 6-8% from 9.7% in H1.
ICRA analyzed 26 public sector banks and 15 private sector banks. These 41 banks collectively account for around 90 % of the total credit portfolio and deposits as of the September quarter this fiscal year.
- ICRA Limited , an Indian independent and professional investment information and credit rating agency credit rating agency was set up in 1991. Its headquarters are at Gurgaon.