To curb defaults, Canara Bank offers to reschedule education loans--Business Line 26th June 2013
COIMBATORE, JUNE 25:
State-run Canara Bank has come up with a ‘one-time settlement’ to help student borrowers reschedule their education loan.
The bank’s Chairman and Managing Director R. K. Dubey told newspersons here on Tuesday that while the bank is interested in lending more, lest a student is deprived of education (for want of funds), poor recovery has been a matter of concern.
‘Nevertheless, we are willing to reach out to all the parents to understand their difficulty in repaying their dues. We are willing to extend the loan tenure and facilitate easy repayment,’ he added.
Canara Bank’s educational loan NPA (non-performing asset) is around 9 per cent, Dubey said.
The demand for student loans is said to be high in States such as Tamil Nadu and Kerala compared with those in the North.
While the bank’s total educational loan exposure is around Rs 4,200 crore, the quantum advanced in Tamil Nadu is around Rs 430 crore, and in Kerala, marginally higher.
But over Rs 100 crore of the Rs 430 crore student loan given in Tamil Nadu has been categorised as NPAs. “This is quite high and is a cause of concern for us,” he added.
The bank, meanwhile, is getting aggressive on education loans.
“We will not shy away. Instead, we will look to advance more and be aggressive on the recovery front too.
“By rescheduling the loan and facilitating easy repayment of dues, we are confident of bringing the NPA down to 2 per cent in 18 months time,’ the bank’s chief said.
Asked if he expected a loan waiver, Dubey said, ‘No, not on education loan.’
Canara Bank is also looking to boost lending to micro industries and the retail segment.
Restructuring pressure to continue for SBI in Q4--Economic Times
State Bank of India could see a significant rise in its restructured assets for the fourth quarter. The country's largest bank is due to announce its fourth quarter results onThursday, May 23, 2013. According to sources, SBI could see restructuring close toRs 8000 crore for the fourth quarter. The chunk of the restructuring for the quarter includes one large account which is Suzlon, where SBI's exposure is close to Rs 1600crore . The other restructured accounts are mainly smaller accounts coming from sectors like infra, mid-corporates, iron and steel.
According to analysts, this high amount of restructuring could see a significant rise in provisions on restructured accounts for SBI in Q4. The Reserve Bank of India has recently enhanced provisioning requirements for banks' restructured assets, and this amount may end up being a drag on the bank's profits.
However, asset quality overall seems to have eased for the bank. Though SBI saw bad loans rise through FY13 with fresh slippages as high as Rs 10000 crore in Q2 FY13, Q4 seems to have eased the pressure. According to a person with direct knowledge, fresh slippages for the fourth quarter could be between Rs 5000-6000 crore, a figure much less than what the bank has seen in previous quarters.
Sources also say that write-offs for Q4 could be to the tune of Rs 2000 crore, and loan recoveries could amount to Rs 1000-1200 crore. Not just that, upgradations of loans from theNPA to standard category could also be high for the quarter, at around Rs 4500-5000 crore.
Even the bank's chairman Pratip Chaudhuri has told media "NPAs for Q4 will be much lesser than Q3 and also what they saw in the previous quarters. Gross non-performing assets have come down to Rs 49,000 crore from the Rs 52,000 crore earlier in Q3 down to 4.5 per cent from 5.3% in preceding 3 months period. The bank still continues to face stress from contractors which are facing delay in payments, iron and steel, infra and construction sectors to name a few."
According to analysts, this high amount of restructuring could see a significant rise in provisions on restructured accounts for SBI in Q4. The Reserve Bank of India has recently enhanced provisioning requirements for banks' restructured assets, and this amount may end up being a drag on the bank's profits.
However, asset quality overall seems to have eased for the bank. Though SBI saw bad loans rise through FY13 with fresh slippages as high as Rs 10000 crore in Q2 FY13, Q4 seems to have eased the pressure. According to a person with direct knowledge, fresh slippages for the fourth quarter could be between Rs 5000-6000 crore, a figure much less than what the bank has seen in previous quarters.
Sources also say that write-offs for Q4 could be to the tune of Rs 2000 crore, and loan recoveries could amount to Rs 1000-1200 crore. Not just that, upgradations of loans from theNPA to standard category could also be high for the quarter, at around Rs 4500-5000 crore.
Even the bank's chairman Pratip Chaudhuri has told media "NPAs for Q4 will be much lesser than Q3 and also what they saw in the previous quarters. Gross non-performing assets have come down to Rs 49,000 crore from the Rs 52,000 crore earlier in Q3 down to 4.5 per cent from 5.3% in preceding 3 months period. The bank still continues to face stress from contractors which are facing delay in payments, iron and steel, infra and construction sectors to name a few."
NPA agony: PSU banks continue to face loan restructuring requests--ET
KOLKATA/MUMBAI: Banks may continue to face tough times for yet another quarter as borrowers, facing business downswing, queue up with loan restructuring requests.
Bank of Baroda(BoB) and Union Bank of India, two big lenders, expect to restructure loans worth Rs 4,800 crore in the first quarter alone as distressed borrowers approach them for debt recast. Another public sector bank, Bank of India, said it may have to restructure loans worth around Rs 500 crore.
While BoB chairman SS Mundra indicated that its restructured loan book stood at Rs 22,617 crore for the year ended March 2013, Union Bank of India's CMD Debabrata Sarkar echoed similar fears, maintaining that the stress may continue for a while. Both these banks have restructured Rs 4,200 crore between them in the fourth quarter. BoB has reported a 32% fall in net profit while Union Bank of Indiasaw a modest 2% rise on account of higher provision to cover bad loans.
"We have restructured loans of Rs 1,400 crore in the fourth quarter and expect to restructure Rs 2,200 crore in the first quarter of this fiscal year. But improving asset quality is now the priority for the bank," Sarkar added.
UBI, which had hit the headlines last month with its aggressive recovery drive, has reported an 80% drop in Q4 net profit at Rs 31 crore on account of bad loans and thinning margin. "The next quarter will be a tight-rope walk for us," the bank's CMD Archana Bhargava said. "Our effort will be to bring down NPAs. We will give it a try. Let's see what happens," she said.
However, Bank of India chief VR Iyer appeared a little more optimistic. "We expect profits to improve and stress to reduce in the coming quarter. A lot will also depend on the operating environment," she added.
The bank's net NPAs rose 62% to Rs 5,947 crore. The aggregate restructured loans stood at Rs 17,641 crore and the incremental restructured loan in Q4 was Rs 2,159 crore.
PNB's net fell 21% to Rs 1,131 crore due to higher provisioning. Its gross NPA ratio has deteriorated to 4.27% from 2.9% a year ago. Net NPAs worsened to 2.4% from 1.5%.
Bank of Baroda(BoB) and Union Bank of India, two big lenders, expect to restructure loans worth Rs 4,800 crore in the first quarter alone as distressed borrowers approach them for debt recast. Another public sector bank, Bank of India, said it may have to restructure loans worth around Rs 500 crore.
While BoB chairman SS Mundra indicated that its restructured loan book stood at Rs 22,617 crore for the year ended March 2013, Union Bank of India's CMD Debabrata Sarkar echoed similar fears, maintaining that the stress may continue for a while. Both these banks have restructured Rs 4,200 crore between them in the fourth quarter. BoB has reported a 32% fall in net profit while Union Bank of Indiasaw a modest 2% rise on account of higher provision to cover bad loans.
"We have restructured loans of Rs 1,400 crore in the fourth quarter and expect to restructure Rs 2,200 crore in the first quarter of this fiscal year. But improving asset quality is now the priority for the bank," Sarkar added.
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However, Bank of India chief VR Iyer appeared a little more optimistic. "We expect profits to improve and stress to reduce in the coming quarter. A lot will also depend on the operating environment," she added.
The bank's net NPAs rose 62% to Rs 5,947 crore. The aggregate restructured loans stood at Rs 17,641 crore and the incremental restructured loan in Q4 was Rs 2,159 crore.
PNB's net fell 21% to Rs 1,131 crore due to higher provisioning. Its gross NPA ratio has deteriorated to 4.27% from 2.9% a year ago. Net NPAs worsened to 2.4% from 1.5%.
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