Net bad loans of 40 listed banks up 38% in H1

Net non-performing assets, or bad loans, of the 40 listed banks have shot up 38 per cent to Rs1,28,533 crore during the first half of this fiscal, from Rs93,109 crore at the end of the last fiscal, and would likely cross Rs1,50,000 crore by the end of the fiscal, according to a study.

Of the total 40 listed banks, 14 banks had reported over 50 per cent jump in their net NPAs during these six months, the study pointed out.

"The share of top 10 banks in net NPAs has come down to 67.8 per cent in September from 70 per cent in March 2013. Net NPAs of seven banks were higher than 3.5 per cent in the September quarter as against none in the March quarter," says the study by a portal NPAsource.com.

According to Devendra Jain, chairman and managing director of the portal, net NPAs in the banking system would likely touch Rs1,50,000 crore by March 2014 as two more quarters remained in the current fiscal year and the situation was worsening every quarter.

Gross NPAs as of the September quarter stood at Rs2,29,007 crore, 27 per cent higher as against Rs1,79,891 crore as of March quarter for these 40 listed banks.

According to the study, gross NPAs of listed banks had doubled since September 2011, even as net NPAs rose by 140 per cent during the same period.

In the second quarter, top public sector banks like State Bank of India, Bank of Baroda, Punjab National Bank, Central Bank, IDBI Bank and Union Bank had all reported over 30 per cent increase in net NPAs.

For SBI, net NPAs increased 2.91 per cent from 2.44 per cent in Q2, though, on a sequential basis, NPAs of the nation's largest lender came down by 39.23 per cent. The rising provisions for bad assets saw the net profit of the bank fall 35.03 per cent.

Interestingly, the percentage of top 10 banks in net NPAs was down to 67.8 per cent in September, 2013 from 70 per cent in March, 2013.

According to Jain, with interest rates expected to remain high at least for the remaining fiscal and the economy and corporate in poor shape, banks have a tough road ahead.

Jain said more pressure on non-performing assets would come in the next two quarters as many restructured loans would get converted to NPAs.