Breaking News

You are here » Indian-Commodity  :  Top News  :  Banks gross NPA may remain in range of 8-8.5% in March 2017: ICRA

15-Jul2016

Banks gross NPA may remain in range of 8-8.5% in March 2017: ICRA

Domestic rating agency ICRA has said that banks gross Non-performing Assets (NPAs) could be nearing peak levels in the range of 8-8.5% by March 2017, as compared to 7.7% as on March 2016. It also added that, asset quality is not expected to improve substantially in near term.

In its latest report the agency stated that, credit growth is likely to be in the range of 11-12% in 2016-17, primarily driven by retail and other smaller ticket loans. Deposit growth will be in the range of 10-11% in the current fiscal.  Besides, it also said that public sector banks' (PSBs) profitability is not expected to improve significantly in 2016-17, return on equity (RoE) will remain in single digits.

The report further said that, relaxations in Basel III norms in March 2016 improved state PSBs tier-1 capital by 30-100 basis points, despite relaxations, infusion of Rs 25,000 crore by the government and low credit growth, state-run banks' capitalisation remained low with aggregated tier 1 at around 9.1% as on March 2016. Also, PSBs will need Rs 40,000-50,000 crore tier 1 capital raising in this fiscal as against government capital infusion plan of Rs 25,000 crore.

ICRA also said that significant improvement in asset quality will hinge upon economic recovery in credit intensive sectors, as well as successful execution of deleveraging efforts by some stressed corporate groups. Further, sluggishness in deposit growth could be on account of psychological impact on depositors following a decline in nominal interest rates on deposits, significant raising of tax-free bonds over the last few years providing alternative safe savings avenue, increase in limit for remittances and banks reducing dependence on large ticket deposits on the back of muted credit growth.


Related News

View all news

Crude oil futures end lower on Monday

Crude oil futures ended lower on Monday as steep declines in the US stock market fed an aversion to so-called riskier assets, which include oil. Meanwhile, the US-China trade dispute escalated as China......

Gold futures trade flat on Monday

Gold futures was trading flat on Monday as growing uncertainty over whether the United States and China will be able to reach a deal to end their escalating trade war fueled safe-haven demand for the precious......

Jeera futures trade higher on rising demand

Jeera futures traded higher on NCDEX on the back of rising physical and export demand at the spot market. However, higher availability of crop this season, capped some gains.The contract for May delivery......

Top News

View all news

SRF, NIIT Technologies and United Bank of India to see some action today

SRF has entered into a definitive agreement to sell its Engineering Plastics Business to DSM, the Life Sciences and Materials Sciences Company in an all-cash transaction, amounting to Rs 320 crore. The......

NIIT Technologies concludes sale of 88.99% stake in ESRI India Technologies

NIIT Technologies has concluded the sale of 88.99% equity shares in ESRI India Technologies, India to Environment Systems Research Institute Inc., USA. Consequent to above sale, ESRI India Technologies,......

United Bank of India to raise Rs 1,500 crore by various means

United Bank of India has received approval to raise equity capital not exceeding Rs 1,500 crore in one or more tranches during the financial year by way of Qualified Institutions Placement, Public Issue,......