NPA provisioning for banks moderates in Q2 driven by PSBs

For a sample of 29 publicly listed banks, provisioning for non performing assets (NPA) fell by 2.9% to Rs 27,318.2 crore. For PSBs, it fell by 11.6% to Rs 14,628.3 crore with half of them reporting a year-on-year drop in loan loss provisioning. PSBs including Punjab National Bank, Central Bank of India and Indian Overseas Bank recorded 82-93% fall in the NPA provisioning.

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On the other hand, private sector banks showed 12.5% increase in NPA provisioning for the quarter to Rs 12,690 crore, led by select banks including ICICI Bank, Axis bank, Kotak Bank, IDBI Bank and Federal bank.

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Three out of every four private sector banks reported a year-on-year increase in their NPA provisioning. As a result, their share in the quarterly NPA provisioning increased to 46.5% from 41.2% a year ago and 42.1% in the previous quarter.

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On the income front, private sector banks performed better than the PSBs. The total sample’s net interest income (NII) grew by 6.5% year-on-year to Rs 1,98,668 crore led by 11.3% growth in the aggregate NII of the private banks at Rs 96,122.7 crore. NII for the PSBs rose by a modest 2.4% to Rs 1,02,545 crore.
Each of the 17 private sector banks and 10 out of 12 PSBs in the sample reported a year-on-year growth in NII for the September quarter. The share of private banks in the sample’s NII improved to 48.4% from 46.3% in the year-ago quarter and 47.6% in the prior quarter.