Banks' bad loans to rise in fiscal 2013: Fitch
Collected from Economic times
A sharp increase in non-performing loans reported at India's largest government banks indicates that fiscal 2013 impaired assets across the banking sector may exceed our initial forecast as the economy slows, Fitch Ratings says.
Absolute cumulative gross NPLs reported at India's five largest banks - accounting for over a third of the system assets - increased by around 62% in Q1 13 from a year before, and there was also a sharp increase in restructured assets. State Bank of India, the country's largest bank, reported a gross NPL ratio of 5% in Q113, up from 4.5% in FY12. The trend is matched across other large and small government banks, albeit to varying degrees.
Our estimate of 3.75% for system-wide gross NPLs in the fiscal year ending March 2013 (FY12: 2.9%) could therefore be exceeded in light of the continuing pressures on the economy. India's real GDP growth weakened by around 190bp in FY12 to 6.5%, with deceleration particularly strong in Q412 and Q113 - the impact of which is yet to be fully reflected in the Indian banking system's asset quality.
We believe that the combination of global (euro crisis and high commodity prices) and domestic (high interest rates) challenges look increasingly formidable. The government's reduced fiscal flexibility, coupled with late monsoons - in light of agriculture's high contribution to GDP - could further increase these pressures, a rebound from which could take longer than expected. We expect stressed assets in the system, including unseasoned restructured loans, to reach around 10% by FY13 from 6.7% in FY10.
The large government banks' loan diversity, funding stability and access to capital means they are able to withstand significant pressure on their funded and unfunded asset exposures, and this is reflected in their standalone ratings. Medium and small government banks look relatively more vulnerable.
Nevertheless, asset-quality performance at government banks has sharply lagged behind that of the private banks, which are experiencing relatively stable asset quality. We believe this highlights the need for further strengthening of risk underwriting and monitoring mechanisms at government banks. These issues will need to be addressed as the government banks may find it hard to raise the significant capital required under migration to Basel III if they have large stocks of stressed assets.
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FRIDAY, AUGUST 24, 2012
Pathetic Position of Bankers , Huge Vacant Post But Youth Avoid Joining Bank or Leave Bank in short Period After Joining
It is reported that as many as 41,146 posts, including of officers, were lying vacant in 19 nationalised banks at the end of March 2012, the government today said. There were vacancies for as many as 20,785 officers and 12,695 clerical level posts as on March 31, 2012, Minister of State for Finance Namo Narain Meena said in a written reply in the Rajya Sabha.
TUESDAY, AUGUST 07, 2012
NOT only NPA But Growth of Frauds Is Also With Alarming Speed
CBI developing database to curb banking frauds
WEDNESDAY, FEBRUARY 01, 2012
Banking News on Rating of Banks
Result for the Quarter ended June 2012 announced by the largest state run bank called State Bank of India is now out and the result is enough to point out in what direction SBI is moving and what is the hidden truth of other smaller banks coming under public sector. When the result of largest bank is deteriorating quarter after quarter, what will be the fate of other banks, one can imagine. Those who are highly positive minded, they can still imagine of good future. Result is given in brief below.
THURSDAY, MAY 10, 2012
All is Not Well In Government Banks
| Loans to pharma companies turn bitter pill for banks |
| Loans of more than Rs 2,000 cr to Surya Pharma, Orchid Chem need restructuring |
| Manojit Saha / Mumbai Aug 15, 2012, 00:50 IST ( taken from newspaper Business Standard ) http://www.business-standard.com/india/news/loans-to-pharma-companies-turn-bitter-pill-for-banks/483322/ http://dkjain497091112006.blogspot.in/2012/05/all-is-not-in-government-banks.html SATURDAY, MARCH 10, 2012Public and Private Sector Banks
Reality of stimulus package is now visible; Fiscal deficit is increasing , trade deficit is increasing, current account deficit is increasing and GDP is coming down, IIP figure is coming down, rating of banks is coming down rating of country is at alarming position and so on ….Borrowing by government has been consistently increasing, public debt has reached to the level of 46 lac crores i.e. around 40% of GDP. Still government is allowing one after other subsidies to big corporates, exporters and importers.
THURSDAY, AUGUST 16, 2012Future of Government Banks Depend of Quality of Human ResourceFutures of State Run Banks depend on their understanding of root causes of present crisis and their ability to take remedial measures. If they still say that bank is safe and future is bright they will never take corrective step. But their false ego may jeopardize the interest of investors and poor customers and also their employees: |
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