Page 29 - Public Sector Banks

Limited capital pool to squeeze PSBs' loan growth, warns India Ratings

Consequently, that may adversely impact India's economic growth from FY18, says the ratings agency

Decision on capital infusion in select PSBs likely this week

The government has made Budget provision of Rs 25,000-crore capital infusion in PSBs for the current financial year

Letters: Handling PSB problems

"Worst-case scenario for the banking crisis" (July 11) makes a case for hastening the process of "privatisation" of India's banking system. There are similarities between the way in which public sector mutual fund UTI was handled when private mutual funds found its presence uncomfortable and the approach of analysts like Ajay Shah to the public sector banks' (PSBs) predicament. It is easy to get confused by comparisons in totally different situations. Let us be clear that there is no "banking crisis" in India as of now. This is not to deny the need to urgently tackle the problems faced by the sector due to policy lapses spreading over a decade or so.As private sector banks have failed to grow and improve their share in India's banking business to any respectable level despite under-performance by PSBs, the country is left with no option but to rejuvenate PSBs. In this context, a shift from the present palliative care approach to one for rejuvenation has to be fast. Anyway, transfer of

Bank consolidation risks may outweigh benefits: Moody's

No PSB currently has the strength to assume a consolidator role without its own post-merger credit standing being questioned Moody's said India's banking system has witnessed an increase in non-performing assets (NPAs) since 2012, with many public sector banks (PSBs) having suffered significant deterioration in balancesheets as demonstrated by their asset quality metrics and capitalisation profile. "As a result, no PSB currently has the financial strength to assume a consolidator role without leading to questions regarding its own credit standing, post-merger," it said in a report titled 'Banks -- India: Consolidation of Public Sector Banks Will Face Challenges Under Current Conditions'. Its hypothetical analysis of acquisition of a weak bank by several larger PSBs in the system pointed to a likely significant deterioration in credit metrics for the surviving entity, which underscored ..

Subir Roy: The bell tolls for public sector banks

The government has only one option: plan and organise its exit as systematically as possible

PSBs need Rs 1.2 lakh cr capital infusion from govt: Moody's

According to Moody's, increased provisioning will constrain profitability and limit internal capital generation

PSB losses on higher provisioning; will provide more funds: FM Arun Jaitley

Jaitley also said that the government had earmarked Rs 25,000 crore for recapitalisation of state-owned banks

Jaitley to review state-run banks performance on Monday

Jaitley would "review the overall performance of PSBs during financial year 2015-16

Loan pain to choke PSBs' dividend payout

Banks face the twin challenges of lower earnings due to muted credit growth and swelling of NPA provisions in FY16

Burgeoning bad loans a serious concern for public sector banks

Rising bad loans continued to haunt public sector banks (PSBs) in the March 2016 quarter. As they complied with the Reserve Bank of India's recent asset quality review, their provisioning for this surged sharply. Nine of the 19 PSBs that have announced quarterly results so far witnessed a two-four times year-on-year jump in their provisioning. Syndicate Bank, Allahabad Bank and Bank of Baroda occupied the top three slots on this front. Of the rest, nine banks saw a one-two times rise in provisions. Consequently, 10 banks reported a net loss versus a net profit in the March 2015 quarter, with Punjab National Bank posting the highest-ever loss by an Indian bank. The combined gross non-performing assets of these banks now stands at Rs 2,91,984 crore. With State Bank of India declaring results next week, this figure could rise. The weak provision coverage ratio of these banks (between 48 and 62 per cent) reflects their inability to absorb any more stress. Amid subdued credit offtake and p

Letters: Save public sector banks

Apropos the report, "Six PSBs bottom line hit as bad loans mount" (May 14) by Namrata Acharya, Anup Roy and Abhijit Lele, while the results of some public sector banks are yet to be declared, those that have been published are painful to investors.Several banks have contended that the surge in bad loans and profits turning into losses are due to the asset quality review made in terms of the Reserve Bank of India directives to cleanse the balance sheets. Had the banks identified their non-performing loans in time, it would have been possible to administer remedies. By postponing the death of these accounts, banks have paved the way for deterioration in the quality and value of the securities charged, as well as left the door open for wilful default.Despite the initiatives taken by the government and the banking regulator, there is no marked improvement in the banking business. Mounting bad loans and plummeting returns on assets are beating down the value of the scrips of public sector b

Six PSBs' bottom line hit as bad loans mount

Weighed down by stressed assets and provisions, the bottom line of six public sector banks came under pressure in the fourth quarter (Q4) of FY16. Five of them, including Bank of Baroda (BoB), posted a net loss while Union Bank of India reported a fall in net profit in the March 2016 quarter.BoB, the largest among them, reported a loss of Rs 3,230 crore in the quarter under review compared with Rs 598 crore profit in the same period a year ago.Kolkata-based UCO Bank also posted a massive net loss of Rs 1,715 crore in Q4 of FY16, against a net profit of Rs 209 crore in the same quarter in FY15. Sequentially, the net loss swelled by 15 per cent from Rs 1,497 crore in Q3 of FY16.Another lender that recorded loss in Q4 was Allahabad Bank, at Rs 581 crore, against Rs 203 crore profit reported in the same period a year ago. The loss was contained because it saw a tax write-back of Rs 1,033 crore in Q4, against a tax expense of Rs 175 crore.Mumbai-based Dena Bank posted a net loss of Rs 326 c

Public sector bank officers seek more teeth to recover advances

Data shows that Rs 2,25,000 crores worth assets are NPA.

Govt to fill vacant posts of chairmen in nine state banks

A senior finance ministry official said the process to fill vacancies of non-executive chairman in nine state-run banks was underway

Public sector banks write off 38 accounts worth Rs 8,033 crore

For FY15, banks had written off 47 such accounts, totalling Rs 13,018 crore, Minister of State for Finance Jayant Sinha said in a written reply in the Rajya Sabha

Banks with strong networks will find takers

In terms of asset quality, for instance, IOB and UCO Bank are the worst placed as they had the highest gross NPA

Use rally to exit PSBs, say analysts

Despite various measures, these banks are not out of the woods

Budget credit-negative for PSBs: Moody's

The Union Budget is credit negative for public sector banks as lower capital infusion announced by the government will be insufficient for lenders in a rising NPAs scenario, global rating agency Moody's said today. The government has stuck to the capital infusion roadmap that was announced last year, budgeting only Rs 25,000 crore capital injections for the public sector banks in the fiscal 2016-2017. As per Capitaline data, gross non-performing assets of 39 listed banks surged to Rs 4.38 lakh crore in the December quarter, up from Rs 3.4 lakh crore in the September quarter. Most of them are contributed by state-run banks. The only silver-lining in the Budget was that the government was open to infuse more capital as and when needed. "The Budget is largely credit negative for public sector banks as the planned capital allocation for the coming fiscal year will likely be insufficient due to the sector's increased recognition of NPAs," Moody's said in a report. It further said ...

At Rs 4 lakh cr, bad loans exceed market value of PSBs

Bad loans of private sector banks are just about 6.6% of their total valuation

PSBs' credit profile at risk without more capital: Fitch

The central bank had nudged all lenders, public and private, to identify all stressed accounts and significantly raise provisioning over two quarters