Tag: npa

Net profit zooms to Rs 1,181 cr, BFSI News, ET BFSI

Banking & Finance

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Mumbai: Union Bank of India on Thursday reported over three-fold jump in standalone net profit at Rs 1,181 crore for June quarter 2021-22, helped by higher net interest income and improvement in asset quality.

The lender had reported a standalone profit after tax of Rs 333 crore in the year-ago period.

The consolidated profit in the quarter jumped over three folds to Rs 1,120.15 crore.

“The bank’s performance has stabilised and we have seen substantial improvement. After almost three to four quarters, we have seen a normal quarter on the business side.

“Even though we have lost the first two months (of Q1), by June it stabilised. If you look at the numbers, they are very stable except for some heightened NPAs, particularly coming from the MSME side,” bank’s Managing Director and CEO Rajkiran Rai G told reporters.

Net interest income grew 9.53 per cent to Rs 7,013 crore from Rs 6,403 crore in the year-ago quarter.

Net interest margins (NIM) improved by 30 basis points (bps) to 3.08 per cent as against 2.78 per cent.

Gross non-performing assets (GNPAs) of the lender reduced by 135 bps to 13.60 per cent from 14.95 per cent and net NPA was down 28 bps to 4.69 per cent from 4.97 per cent.

Fresh slippages during the quarter stood at Rs 7,049 crore. Around 45 per cent of slippages came in from the MSME sector as it was mostly affected during COVID wave, Rai said.

He said with restructuring and the Emergency Credit Line Guarantee Scheme (ECLGS) facilities, the stress is likely to reduce going ahead.

Under RBI’s Resolution Framework 1.0, the bank restructured Rs 11,965 crore and under Resolution Framework 2.0, total recast during the first quarter was Rs 3,962 crore till June 30.

“We expect another Rs 2,000 crore of restructuring in retail and MSME segments put together in the second quarter,” Rai said.

During the quarter, recovery and upgradation stood at Rs 4,341 crore. It recovered Rs 250 crore of dues related to Kingfisher Airlines. The bank has a recovery target of Rs 13,000 crore for the full year.

Capital to risky asset ratio (CRAR) improved to 13.32 per cent from 11.62 per cent. Common Equity Tier 1 (CET1) ratio improved to 9.77 per cent from 8.40 per cent.

The bank’s deposits grew 1.79 per cent to Rs 9,08,528 crore as of June 30, 2021. Domestic advances rose 0.16 per cent to Rs 6,30,237 crore as at end-June.

It registered 10.61 per cent growth in retail, 12.70 per cent growth in agriculture and 3.33 per cent growth in MSME advances on year-on-year basis. Rai attributed flat growth in advances to large corporate book not growing. He, however, said the bank has a large sanction pipeline and unutilized working capital limits.

“We hope by second and third quarter, the utilisation of limits will go up and expect a credit growth of 8 to 10 per cent by the end of the year,” he said.

On the amalgamation of Andhra Bank and Corporation Bank, Rai said the bank expects a synergy benefit of Rs 3,600 crore over a period of three years. The amalgamation came into effect from April 1, 2020.

In 2020-21, the bank got a synergy benefit of Rs 2,400 crore and it expects Rs 900 crore of benefits in this fiscal year, he said.

The bank’s scrip closed at Rs 37.95, up 6.90 per cent on BSE.



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Punjab & Sind Bank reports Q1 net profit at Rs 174 cr, BFSI News, ET BFSI

Banking & Finance

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State-owned Punjab & Sind Bank on Thursday reported a net profit of Rs 173.85 crore for the first quarter ended June 30. The bank had posted a net loss of Rs 116.89 crore a year ago. Sequentially, it had registered a net profit of Rs 160.79 crore in the March 2021 quarter.

The total income of the bank during Q1FY22 rose to Rs 2,039.61 crore from Rs 1,954.39 crore in Q1FY21, Punjab & Sind Bank said in a regulatory filing.

Provisions for bad loans and contingencies for the quarter fell to Rs 77.30 crore from Rs 382.56 crore in the year-ago period.

The bank’s asset quality showed an improvement and the gross non-performing assets (NPAs or bad loans) came down to 13.33 per cent of the gross advances as of June 30, 2021, against 14.34 per cent a year ago.

In absolute value, the net NPAs stood at Rs 9,054.96 crore, up from Rs 8,848.06 crore.

The net NPAs ratio fell to 3.61 per cent (Rs 2,206.70 crore), from 7.57 per cent (Rs 4,326.41 crore).

The bank said it has kept the account of Delhi Airport Metro Express Pvt Ltd (DAMEPL) as standard, in accordance with the Supreme Court order and RBI guidelines.

The bank has not treated an outstanding of Rs 166.63 crore towards DAMEPL as NPA, it said. It has held the provisions of Rs 92.24 crore against this, higher than the required Rs 49.59 crore.

The provision coverage ratio of the bank stood at 84.22 per cent as of June 30, 2021, and the liquidity coverage ratio at 215.52 per cent.

Shares of the bank jumped 4.37 per cent to close at Rs 20.30 apiece on BSE.



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IDBI Bank net profit surges 318 per cent to ₹603 crore in Q1FY22

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IDBI Bank’s first-quarter standalone net profit soared 318 per cent year-on-year (y-o-y) to ₹603 crore on the back of healthy growth in net interest income and other income.

The bank had reported a net profit of ₹144 crore in the year ago quarter.

In the first quarter ended June 30, 2021, net interest income (NII) was up 41 per cent y-o-y to ₹2,506 crore (₹1,772 crore in the year ago quarter).

Other income, comprising income from activities such as commission, fees, earnings from foreign exchange and derivative transactions, profit and loss from the sale of investment and recoveries from written-off accounts, jumped 63 per cent y-o-y to ₹1,639 crore (₹1,005 crore).

IDBI Bank to explore avenues to grow corporate credit: Rakesh Sharma

Net interest margin rose to 4.06 per cent from 2.81 per cent in the year ago quarter.

Fresh slippages were lower at ₹1,332 crore (₹2,382 crore in the fourth quarter/Q4 of FY21). The increase in existing non-performing assets (NPAs) was at ₹245 crore (₹250 crore).

Gross NPAs edged up to 22.71 per cent of gross advances as at June-end 2021 against 22.37 per cent as at March-end 2021.

Net NPA position, however, improved to 1.67 per cent of net advances as at June-end 2021, against 1.97 per cent as at March-end, 2021.

Higher provisions towards NPAs

The bank made higher provisions towards NPAs (₹199 crore against a write-back of ₹1,120 crore in Q4FY21) and restructured assets (₹178 crore against ₹9 crore provision). However, provision towards standard assets declined to ₹353 crore (₹708 crore in Q4FY21).

During the reporting quarter, IDBI Bank made an additional provision of ₹447 crore over and above the income recognition and asset classification norms in respect of certain borrower accounts in view of the inherent risk and uncertainty of recovery in these identified accounts.

IDBI Bank has transformed into a retail bank: Samuel Joseph, Dy MD

Deposits nudged up about 1.37 per cent y-o-y to ₹2,22,381 crore. Advances declined about 2.29 per cent y-o-y to ₹1,22,994 crore.

The bank said it has made provision of ₹902 crore during the quarter ended June 30, 2021, towards the estimated shortfall in recoveries by the Stressed Assets Stabilisation Fund Trust.

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Canara Bank restructures loans worth Rs 13,000 crore, MSME, retail worst hit, BFSI News, ET BFSI

Banking & Finance

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Public sector lender Canara Bank has restructured loans of over Rs 13,000 crore as MSME and retail loans took a beating due to the second Covid wave. Fresh slippages came at Rs 4,253 crore which fell sharply on a sequential basis, 19% of the slippages came from the retail segment and 56% came from MSMEs. The bank also restructured loans worth Rs 13,234 crore under the Covid 2.0 recast scheme, out of this Rs 7,610 crore worth of loans were recast from the retail sector while Rs 3,331 crore came from MSMEs. Special mention category loans or which are due beyond 0-90 days stood at Rs 23,985 crore.

“For the retail and MSMEs borrowers who we have assisted with the Covid recast scheme a part of them have started to pre-pay and we are hopeful that as business momentum recovers a large part of these accounts will normalise,” said L.V. Prabhakar, MD, Canara Bank. “As of June 30, our collection efficiency is 91%, which means instalments are coming. There was stress which was duly addressed by giving them recast benefit.”

Profits nearly tripled to Rs 1,177 crore at the end of the June quarter as fee income and treasury gains grew sharply. The lender had reported profits of Rs 406 crore in the corresponding period last year. Though it’s net interest income was flat at Rs 6,147 crore from Rs 6,096 crore in Q1FY21.

Non-Interest Income which includes fees and treasury gains was up by 67.47% to Rs 4,438 crore in the June quarter versus Rs 2,650 crore a year ago.

The bank reported improvement in asset quality metrics. It’s GNPA ratio came at 8.50% for the quarter under review from 8.84% a year ago. Net NPA ratio was at 3.46%.

Total provisions rose nearly 18% to Rs 4574 crore at the end of the June quarter versus Rs 3880 crore a year ago. This included a one time income tax provision of Rs 845 crores. The bank also holds Covid related provisions of Rs 842 crore.

It’s total loans grew by 5.94% to Rs 6.6 lakh crore, out of which retail loans grew at 9.57% while agriculture loans rose 17.03%. The bank said it is targeting an annual credit growth rate of 7-8%.

Net Interest Margin for the reporting quarter fell to 2.71 per cent for Q1FY22 as against 2.84 per cent for Q1FY21.

The bank’s asset quality profile improved with gross non-performing assets down to 8.5 per cent in June 2021 from 8.84 percent during Q1FY21. The net NPA also dipped to 3.46 per cent during the quarter from 3.95 per cent in June 2020.



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IndusInd Bank’s net profit doubles to Rs 1,016 cr in Jun quarter, BFSI News, ET BFSI

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New Delhi, Jul 27 () Private sector lender IndusInd Bank on Tuesday reported doubling of its consolidated net profit to Rs 1,016.11 crore in the June 2021 quarter, aided by healthy growth in retail loans and lower NPA provisioning. The bank had posted a net profit of Rs 510.39 crore in the corresponding quarter of the previous financial year.

Its total income during April-June 2021 rose to Rs 9,362.76 crore from Rs 8,682.17 crore in the year-ago period, according to a regulatory filing by IndusInd Bank.

Interest income was up at Rs 7,574.70 crore, against Rs 7,161.73 crore a year ago.

Income from retail banking rose nearly 22 per cent to Rs 5,685.53 crore in the June 2021 quarter, from Rs 4,674.06 crore in the year-ago quarter.

The bank’s asset quality showed little impairment on a gross level, as the non-performing assets (NPAs) rose slightly to 2.88 per cent of the gross advances as of June 2021, as against 2.53 per cent by the year-ago period.

Net NPAs or bad loans, however, came down to 0.84 per cent from 0.86 per cent a year ago.

Provisioning for bad loans and contingencies for the reported quarter came down to Rs 1,844.02 crore, from the Rs 2,258.88 crore parked aside for same quarter of 2020-21.

The bank’s consolidated financial statement comprises statements of IndusInd Bank, Bharat Financial Inclusion Ltd (fully owned subsidiary), and IndusInd Marketing and Financial Services Pvt Ltd (associate company).

On a standalone basis, the lender’s net profit jumped over two times to Rs 974.95 crore in the June 2021 quarter, compared with Rs 460.64 crore in the year-ago period.

Income rose to Rs 9,355.77 crore, from Rs 8,680.92 crore a year ago, the bank said.

The bank’s shares on Tuesday closed 0.58 per cent lower at Rs 975.65 apiece on the BSE. KPM HRS hrs



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Minister, BFSI News, ET BFSI

Banking & Finance

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Non-performing assets (NPAs) or bad loans of banks have declined by Rs 61,180 crore to Rs 8.34 lakh crore at the end of March 31, 2021, as result of various steps taken by the government, Minister of State for Finance Bhagwat K Karad said on Monday.

Scheduled commercial banks (SCBs) were carrying NPAs worth Rs 8.96 lakh crore on their balance sheet at the end of March 2020.

“Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of SCBs, as per RBI data on global operations, rose from Rs 3,23,464 crore as on 31.3.2015, to Rs 10,36,187 crore on 31.3.2018, and as a result of Government’s strategy of recognition, resolution, recapitalisation and reforms, have since declined to Rs 9,33,779 crore on 31.3.2019, Rs. 8,96,082 crore as on 31.3.2020, and further to Rs 8,34,902 crore (provisional data) as on 31.3.2021,” he said.

Karad in a written reply to the Lok Sabha said COVID-19 Regulatory Package announced by RBI permitted lending institutions to grant a moratorium of six months on payment of all instalments falling due between March 1 and August 31, 2020, in respect of all term loans and to defer the recovery of interest for the same period in respect of working capital facilities.

Replying to another question, Karad said, gross NPAs of public sector banks (PSBs) peaked at Rs 8,95,601 crore on March 31, 2018.

As a result of Government’s strategy of recognition, resolution, recapitalisation and reforms, NPAs have since declined to Rs 7,39,541 crore on March 31, 2019, Rs 6,78,317 crore on March 31, 2020 and further to Rs 6,16,616 crore as on March 31, 2021 (provisional data).

“The net NPAs have displayed a similar trend, increasing initially from Rs 1,24,095 crore on 31.3.2014 to Rs 2,14,549 crore on 31.3.2015, Rs 3,24,372 crore on 31.3.2016, Rs 3,82,087 crore on 31.3.2017 and peaking at Rs 4,54,221 on 31.3.2018, and declining thereafter to Rs 2,84,689 crore on 31.3.2019, Rs 2,31,551 crore on 31.3.2020 and further to Rs 1,97,360 crore as on 31.3.2021 (provisional data),” he said.

Throughout this period, he said, PSBs continued to post aggregate operating profits of Rs 1,37,151 crore, Rs 1,58,994 crore, Rs 1,55,603 crore, Rs 1,49,819 crore, Rs 1,74,640 crore in the financial year 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 respectively.

“However, primarily due to continuing ageing provision for NPAs, they made aggregate provision for NPAs and other contingencies of Rs 1,55,226 crore, Rs 1,70,371 crore, Rs 2,40,956 crore, Rs 2,17,481 crore and Rs 2,00,404 crore respectively in the said years, resulting in aggregate net losses of Rs 17,993 crore, Rs 11,389 crore, Rs 85,370 crore, Rs 66,636 crore and Rs 25,941 crore respectively and returning to profitability thereafterwith aggregate net profit of Rs 31,820crore in FY2020-21,” he said.

At the same time comprehensive steps were taken to control and to effect recovery in NPAs, which enabled PSBs to recover Rs 5,01,479 crore over the last six financial years, he added.

In a reply to another question, Karad said overall credit growth of Scheduled Commercial Banks (SCBs) has remained positive for 2020-21 despite contraction in GDP (-7.3 per cent) due to the COVID-19 pandemic.

‘Gross Loans and Advances – Outstanding’ of SCBs increased from Rs 109.19 lakh crore as of March 31, 2020 to Rs 113.99 lakh crore as of March 31, 2021, he said.

Further, he said, as per RBI data of loans to agriculture and allied activities, micro, small & medium enterprises, housing and vehicle have witnessed a year-on-year growth of 12.3 per cent, 8.5 per cent, 9.1 per cent and 9.5 per cent respectively during the year.

Ability of PSBs to further increase lending is evident through Capital to Risk Weighted Assets Ratio which stood at 14.04 per cent as of March 31, 2021, as against regulatory requirement of 10.875 per cent, he added.



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Net profit rises 32% YoY to Rs 1,642 cr; asset quality weakens, BFSI News, ET BFSI

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MUMBAI: Kotak Mahindra Bank today reported a 32 per cent year-on-year rise in its net profit to Rs 1,641.9 crore for the quarter ended June, which was below analysts’ expectations.

The private sector lender reported net interest income growth of 6 per cent on-year to Rs 3,942 crore, which was also below analysts’ estimates.

Provisions and contingencies in the quarter declined to Rs 935 crore from Rs 962 crore in the year-ago quarter. However, the lender saw a deterioration in asset quality in the reported quarter.

Kotak Bank’s gross non-performing loans ratio stood at 3.56 per cent in the reported quarter as against 3.25 per cent at the end of the March quarter. Similarly, the net NPA ratio expanded to 1.28 per cent from 1.21 per cent in the previous quarter.


The private sector bank’s net profit in the quarter was largely boosted by a sharp uptick in other income. Other income in the reported quarter jumped to Rs 1,583.03 crore from Rs 773.5 crore in the year-ago quarter.

Covid-related provisions as on June 30 were maintained at Rs 1,279 crore. In accordance with the Resolution Framework for Covid-19 and MSME announced by the RBI, the bank implemented total restructuring of Rs 552 crore as on June 30, Kotak Bank said.


In terms of loan growth, the quarter was tepid for the bank affected by the second wave as well as its conservative approach. Advances in the quarter grew merely 6 per cent on-year, which was lower than many of its peers.

At the same time, the current account-to-savings account ratio of the lender further improved to 60.2 per cent at the end of the June quarter from 56.7 per cent a year ago.

Kotak Bank’s operating performance was sturdy as operating profit jumped 19 per cent year-on-year to Rs 3,121 crore in the reported quarter.



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Pick up in disbursements, fall in provisions & more, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: ICICI Bank‘s 78 per cent profit growth YoY largely met Street expectations. The 18 per cent growth in net interest income was higher than 14-16 per cent growth anticipated by an ETMarkets.com poll. Provisions fell 63 per cent against expectations of an up to 70 per cent drop. Net interest margin (NIM) rose to 3.89 per cent while asset quality, as suggested by gross non-performing assets (NPAs), deteriorated marginally. Here are the key takeaways from the quarterly results:

Profit in line, NII beats expectations
ICICI Bank’s 78 per cent rise in June quarter was largely in line with an ETMarkets.com poll estimate of 77 per cent growth.

The bottonline growth was lower than 260.47 per cent growth in profit the bank reported in March quarter, but higher than 36 per cent profit growth it reported in the year-ago quarter.

NII growth for the quarter at 15-16 per cent beat expectations. Analysts at an ET NOW poll had expected NII growth at 14 per cent.

Disbursements pick up
ICICI Bank said retail disbursements have picked up in June and July after moderating in April and May due to Covid containment measures in place across various parts of the country.

The disbursement levels, it said, recovered to March levels in June, driven by spending in categories like consumer durables, utilities, education, and insurance. Credits received in the overdraft accounts of business banking and SME customers also picked up in June and July after declining in April and May, it said.

Provisions fall, NPA rises marginally
ICICI Bank said it has changed its policy on non-performing loans during the June quarter to make it more conservative. Provisions for the quarter fell 63 per cent to Rs 2,852 crore from Rs 7,594 crore against expectations of up to 70 per cent fall. This could be due to the bank’s policy change, which the bank said resulted in higher provision on non-performing advances amounting to Rs 1,127 crore for aligning provisions on outstanding loans to the revised policy.

Gross non-performing assets, meanwhile, rose to 5.15 per cent against 4.96 per cent in the March quarter and 5.46 per cent in the year-ago quarter.

Recoveries and upgrades of NPAs, excluding write-offs and sale, stood at Rs 3,627 crore. The bank wrote off Rs 1,589 crore worth gross NPAs in June quarter. Excluding NPAs, the total fund-based outstanding to all borrowers under resolution as per the various extant regulations was Rs 4,864 crore or 0.7 per cent of the total loan portfolio.

Uncertainty still looms
In the absence of regulatory dispensations like moratorium on loan repayments and standstill on asset classification, the impact on the quality of the loan portfolio would likely be sharper and earlier during FY22, the bank said.

“The impact, including with respect to credit quality and provisions, of the Covid-19 pandemic on the bank and the group, is uncertain and will depend on the trajectory of the pandemic, progress and effectiveness of the vaccination programme, the effectiveness of current and future steps taken by the government and central bank to mitigate the economic impact,” it said.

Retail loan growth up 20%, SME 43%
Retail loan portfolio comprised 61.4 per cent of the total loan portfolio as of June 30. Including non-fund outstanding, retail accounted for 50.4 per cent of the total portfolio as on June 30.

For the quarter, the credit growth for the retail segment stood at 20 per cent. The business banking portfolio climbed 53 per cent YoY and was 5.4 per cent of total loans on June 30. The SME business, comprising borrowers with a turnover of less than Rs 250 crore, advanced 43 per cent year-on-year and accounted for 4 per cent of total loans as on June 30.

“Growth in the domestic corporate portfolio was about 11 per cent year-on-year, driven by disbursements to higher-rated corporates and public sector undertakings across various sectors. The growth in performing domestic corporate portfolio, excluding the builder portfolio, was 15 per cent year-on-year on June 30, 2021,” it said. Overall, the credit growth was up 20 per cent, while deposit growth rose 16 per cent.

Subsidiaries reported mixed growth
Subsidiaries reported mixed growth. ICICI Securities, on a consolidated basis, saw 61 per cent YoY jump in profit at Rs 311 crore from Rs 193 crore YoY. ICICI Prudential Asset Management Company clocked 48 per cent year-on-year jump in profit at Rs 380 crore compared Rs 257 crore YoY. The profit after tax at ICICI Lombard General Insurance Company fell to Rs 152 crore from Rs 398 crore. Overall, ICICI Bank’s consolidated profit after tax came in at Rs 4,747 crore compared with Rs 4,886 in the March quarter and Rs 3,118 crore in the year-ago quarter.



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Federal Bank Q1 profit down 8.4%

Banking & Finance

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Private sector lender Federal Bank reported an 8.4 per cent drop in net profit for the quarter ended June 30, 2021 at ₹367.29 crore. Its net profit was ₹400.77 crore in the first quarter of last fiscal.

The bank’s total income grew by 1.9 per cent to ₹4,005.86 crore in the April- June 2021 quarter from ₹3,932.52 crore a year ago.

Net interest income grew by 9.4 per cent to ₹1,418.43 crore in the first quarter this fiscal against ₹1,296.44 crore a year ago.

Other income surged by 33.1 per cent to ₹650.15 crore for the quarter under review.

Provisions increased by 62.6 per cent to ₹641.83 crore in the first quarter this fiscal as against ₹394.62 crore a year ago.

Gross non performing assets also rose to ₹4,649.33 crore or 3.5 per cent of gross advances as on June 30, 2021 versus 2.96 per cent a year ago. Net NPA levels were stable at 1.23 per cent at the end of the first quarter this fiscal versus 1.22 per cent as on June 30, 2020.

Federal Bank said 13 borrower accounts involving ₹600.67 crore were given modifications under the Resolution Framework 2.0.

In a separate stock exchange filing, Federal Bank said its board of directors at the meeting on Friday also approved allotment of 10.48 crore equity shares at the issue price of ₹87.39 per share to International Finance Corporation, IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund.

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CSB Bank Q1 net rises 14%; asset quality deteriorates

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Net interest income of the lender is seen higher by 44.5% y-o-y at Rs 267.8 crore for Q1. (Picture courtesy: IE)

CSB Bank on Thursday reported a 14% year-on-year increase in its first quarter net profit to Rs 61 crore, even as bad loans surged in the gold loan portfolio. The Thrissur-based lender had reported a net profit of Rs 53.56 crore in Q1 of FY21 and a net profit of Rs 42.89 crore in the fourth quarter of the previous fiscal.

The asset quality of the lender deteriorated, with gross non-performing assets (NPA) as a percentage of gross advances standing at 4.88% for Q1FY22, from 2.68% in the preceding quarter and 3.51% in the year-ago period. Net NPA as a percentage of gross advances was at 3.21%, against 1.17 % in the preceding quarter and 1.74% in the first quarter of FY21.

CVR Rajendran, managing director and CEO, said the bank is confident of managing NPAs as the challenges are mainly from the gold segment where recovery is only a matter of time.

Fresh slippages in the quarter under review was seen at Rs 435 crore, of which Rs 337 crore was from gold loans. The gross NPA at the end of Q1 stood at Rs 686 crore, against Rs 401 crore in the year-ago period.

“COVID second wave, coupled with the LTV management of gold loans, did pose some challenges in the first quarter of FY 22. Lockdowns, alternate holidays, slowing down of the economic activity, controlled movements due to strict social distancing norms, lack of transport, etc restricted the customer access to branches, which in turn impacted both fresh pledges and releases. Thankfully, the worse seems to be over now and recoveries are happening in full swing,” he added.

Net interest income of the lender is seen higher by 44.5% y-o-y at Rs 267.8 crore for Q1. Provision coverage is seen lower at 70.20% as on June 31, 2021, compared with 81.73% in the year-ago period.

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