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CLSA presages NPA leg-up for bank bottomlines

Smoke Signals

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Sunil Jain New Delhi
 According to CLSA, while gross NPAs as a percent of bank loans for select banks has been falling steadily from 13.9 per cent in 1998-99 to 8.6 in 2002-03, in absolute terms gross NPAs rose from Rs 21,400 crore to Rs 29,200 crore in 2001-02, but this fell to Rs 29,100 crore in 2002-03.

 The banks included in the CLSA analysis are the State Bank of India, Bank of Baroda, Corporation Bank, Oriental Bank of Commerce, Canara Bank, ICICI Bank and HDFC Bank.

 As a result, according to CLSA, these banks are likely to reduce the amount they set aside for provisioning in their balance sheets, and so will see a big jump in profitability for the current year.

 In 2002-03, for instance, the provisions made by these banks amounted to 39.8 per cent of pre-provisioning profits, up from 31.1 per cent in 1999-00.

 For these banks, around 68.8 per cent of all NPAs have already been provisioned for

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First Published: Jul 17 2003 | 12:00 AM IST

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