Source :14 FEB, 2012, 03.42AM IST, PTI
MUMBAI: Reporting a massive 85 per cent rise in provisioning against non-performing assets, State Bank of India today said one company alone accounted for Rs 1,500 crore of bad loans in the quarter ended December, 2011.
It also noted that Air-India will not become a non-performing asset before April.
"Out of the total fresh slippages, as much as one-fourth or one fifth has come from a single company. So, if you look at the total slippages (net increase) of Rs 6,152 crore, one company alone accounted for around Rs 1,500 crore," SBI Chairman Pratip Chaudhuri said without naming the the company.
It may be recalled that in early January State Bank of India (SBI) had called the Vijay Mallya-led Kingfisher Airlines a non-performing asset. SBI is the the largest creditor to cash-strapped airline.
For this one company, the bank has to set aside Rs 1,200 crore as provisions for this quarter, he said. The bank reported 85 per cent rise in provisioning against bad loans in the December quarter.
Chaudhuri, however, ruled out any hit from exposure to Air India to which SBI has extended a fully secured Rs 1,100 crore loan as cash credit facility.
"If the debt servicing by Air India does not happen this quarter, we will not have to declare it as NPA as they have been servicing till January 31. It won't become a NAP before April.
On the Air India account, he said as of January 31, it is standard.
"The GoM is meeting soon and the AI restructuring will happen post that meeting. There will not be any write down for banks. The entire restructuring exercise is being attempted, planned and implemented in a manner that it does not involve a write down for banks and particularly State Bank," he said.
However, Chaudhuri noted that the aviation sector is at the end of its bad story.
"With the steps that have been rolled out by the government like direct import of ATF, FDI being increased to 49 percent and government recognising aviation as a major activity for connectivity and being so committed, so we think there will be a number of administrative, policy and taxation steps from which will make the outlook for the aviation industry better going forward.
"We do not expect any deterioration in Q4 from this sector, if possible we may also look forward to some improvement," he said.
"Specific securities of three aircraft are assigned to us as guarantee. So in terms of outstanding, we are fully covered and in terms of the government backing that is coming up it would be very surprising to expect the national airline restructuring will also result in losses for a state-owned bank.
"We think that the future borrowings, or at least the interest thereof, would be guaranteed by the government," Chaudhury said
SBI shares today closed 2 per cent lower at Rs 2,129 after on the BSE.
SBI set aside Rs 3,006 crore as provisions, up nearly 85 percent from Rs 1,632 crore in the December 10 quarter. In the preceding quarter, it increased provisions for non-performing loans by 35 percent from a year earlier.
The gross NPA of the bank touched a record Rs 40,0098 crore or 4.61 percent of its total advances, while net NPA rose to 2.22 percent or Rs 18,803 crore during the quarter.
The bank had fresh slippages of Rs 8161 crore and has recast loans worth Rs 2188 crore during the quarter. Out of this CDR, as much as Rs 1932 crore has become fresh slippages, CFO Diwakar Gupta said. The net increase in NPA was Rs 6152 crore, Gupta added.
The bank has written off Rs 41 crore during the quarter, while it recovered Rs 1026 core and upgraded Rs 942 crore.
The contributors to the slippages include iron and steel (Rs 667 crore), textiles (Rs 462 crore), sugar (Rs 148 crore), paper and plastics (Rs 322 crore). Segment wise, large corporates accounted for (Rs 4,000 crore), SMEs (Rs 2100 crore), agri loans (Rs 1100 crore) retail (Rs 400 crore) and Rs 600 crore from international operations.
The break-up of the Rs 2188 crore worth CDR includes Rs 500 crore from textiles, Rs 700 crore from iron and steel, Rs 100 crore from engineering and Rs 225 crore from paper and plastic sector.
On the shares it holds in KFA, Chudhuri said we have some 2 percent in the carrier which were given to us following the CDR and bought at Rs 67 a share. So the value diminution of the share has already been taken care of.
He also said the bank has no exposure to SpiceJet On the power sector he said, the bank is not worried much as it has only meagre exposure to the TN and Rajastjan SEBs. The overall exposure to the power sector is around Rs 4,000 crore, he said.
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