Net bad loans of 40 banks soar by 38 per cent in April-Sept

The net bad assets of the 40 listed banks have jumped 38 per cent to Rs 1,28,533 crore during the first half of this financial year, from Rs 93,109 crore at the end of the last financial year.

According to a study by NPAsource.com, of the total 40 listed banks, 14 banks have reported more than 50 per cent jump in their net non-performing assets (NPAs) during these six months.

NPAs are likely to cross Rs 1.5 lakh crore by the end of 2013-14.

"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 at the September quarter as against none at the March quarter," the study said.

During 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 have all reported more than 30 per cent rise in net NPAs.

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

"Net NPAs in the banking system is likely to touch Rs 1.5 lakh crore by March 2014 as two more quarters are remaining in the current fiscal year and the situation is worsening every quarter," Devendra Jain, chairman and managing director of the portal, said.

"With interest rates expected to remain high at least for the remaining fiscal and the economy and corporates in poor shape, banks have a tough road ahead," he added.

Jain further said more pressure on NPAs will come in next two quarters as many restructured loans of last year will get converted to NPAs.

Gross NPAs as of the September quarter stood at Rs 2,29,007 crore, 27 per cent higher when compared to Rs 1,79,891 crore as of March quarter for these 40 listed banks.

According to the study, gross NPAs of listed banks have doubled since September 2011 while net NPAs have risen by 140 per cent during the same period.