MUMBAI: Despite firefighting measures, bad loans across banks saw a whopping increase last financial year. According to data, gross non-performing assets of all scheduled commercial banks shot up 29.1 per cent in FY17.
While public sector banks have been receiving flak over the issue for some time, it was private lenders who saw a bloodbath, as toxic loans jumped by a massive 72.46 per cent. State-run banks saw their gross NPAs grow by 25 per cent in FY17 compared to the last year.
Axis Bank saw the sharpest rise among private lenders, with gross NPAs growing more than two-fold — from `6,088 crore in FY16 to `21,280 crore in FY17. Other players like ICICI and Yes Bank also saw their bad loans jump, partly due to belt-tightening by the RBI.
In fact, it was RBI audit that confirmed the worst fears, that banks were under-reporting data on bad loans. In the case of Yes Bank, the audit brought out significant divergences in NPA disclosures aggregating `4,177 crore. Such variation was also seen in numbers reported by Axis and ICICI Bank.
Consequently, the share of private lenders in the total gross NPAs rose from 8.8 per cent during FY16 to 12 per cent in FY17, while PSBs’ fell from 91.2 per cent to 88.2 per cent. Among PSBs, IDBI saw its gross NPAs jump 80 per cent, prompting RBI to invoke corrective action. Next in line were Oriental Bank of Commerce and Union Bank of India, whose gross NPAs grew at 55.5 and 40 per cent respectively.
While net NPAs of the sector grew 23.14 per cent Y-o-Y, again, private lenders saw a phenomenal increase of 84.6 per cent, while state-run banks saw their net NPAs grow by 18.34 per cent.
In volume terms, gross NPAs of all banks stood at `7.6 lakh crore in FY17 up from `5.9 lakh crore a year ago. FY17’s figure excludes results of Karur Vysa Bank and City Union. For computation purposes, SBI associate banks’ December quarter data was used as they are yet to disclose standalone fourth quarter results,
The only silver lining is, all banks’ bottom line is back in the black witnessing a net profit of `6,039.3 crore during FY17 as against a net loss of `23,091.5 crore a year before. But it remains to be seen if this can be retained given the steady rise in restructured standard advances, which can potentially turn bad, adding to bankers’ woes.
Mounting pressure of NPAs
Gross NPAs
J764439.941 crore in FY17
J592078.5489 crore in FY16
Net NPAs
J425587 crore in FY17
J345639 crore in FY16
Gross
NPAs of PSBs
J674373.6 crore in FY17
J539955.2 crore in FY16
Net NPAs of PSBs
J379255.35 crore in FY17
J320463.5 crore in FY16
Gross
NPAs of private banks
J90666.5 crore in FY17
J52570.3 crore in FY16
(Source: ICRA)