Growth in restructured loan book stabilising

PSBs' stressed assets continue to rise mainly due to higher gross non-performing

While public sector banks stressed assets continue to rise mainly due to higher gross non-performing but the growth in restructured assets seems to be stabilizing, according latest data released by the finance ministry.

Stressed assets, which is total of gross NPA and restructured advances, was 12.61% of gross advances as on end December as compared to 11.02% in March end.

According to data compiled by the ministry, Mumbai-based Central Bank of India has the highest amount of stressed asset which stood at 19.75%, followed by two Kolkata-based lender, UCO Bank and United Bank of India. Punjab National Bank and Andhra Bank are the other two lenders that featured in the top five list of stressed assets.

Public sector banks gross NPAs have grown at a faster pace during the nine month period than the restructured advances with the entire sector gross NPA stood at 5.17per cent as compared to 3.84% in March. The pace of growth of recast loans was far more moderate which was at 7.44% as compared to 7.18%.

Yesterday, finance minister P Chidambaram said he expects bad loans to be higher this fiscal and termed NPA as the biggest challenge for government-owned banks. He was addressing the media after a meeting with state-run bank chief executives to review their performance.

The ministry's note also mentions three lenders that have seen fall in gross NPA over the last one year ended December 2013. These are, UCO Bank, Vijaya Bank and Bank of India. Three banks have been mentioned for having less than 3% gross NPA - Vijaya Bank, Canara Bank and Dena Bank.

In sector wise trend of Gross non-performing assets, the corporate sector has seen highest growth since March 2011, followed by farming and Small and medium size units segment. The real estate and retail sector exhibiting lowest stress.