Foreign banks see a reduction in asset quality despite increase personal loans
by 16, April, 2010 0 |
As per a research report by HDFC Securities there has been a reduction in the asset quality of foreign banks functioning in India despite an increase in their loan books, including personal loans. The loan books of these banks have posted profits.
The report says that about 5% of the loans disbursed by these banks have become bad in the fiscal 2009-10. This has upset the whole non performing assets (NPA) situation of the banks. The systemic slippages of about 16% from the total is contributed by foreign banks.
A senior official of a foreign bank has said that the poor asset quality of these banks will persist in FY’10 also and improvement is anticipated only in FY11.
The FY’09 saw HSBC post a gross NPA of 5.36%, CitiBank has a gross NPA of 5.1% while StanChart was better with NPA of 2.8%. Together these banks comprise 70% of the total balance sheet of the foreign banks functioning in the country. They also make up for 10% of the total gross NPA of the system.
The report said that the Indian operation of foreign banks constitute about 14% of the system’s total profit and, if listed, their market capitalisation would be $28-32 billion, about 25% of the country’s banking system.
Get the best deals on loan offers
Some useful personal finance calculators
Also Read:
