By Simran Gill, ET Now | 20 May, 2013, 10.38AM IST
State Bank of India could see a significant rise in its restructured assets for the fourth quarter. The country's largest bank is due to announce its fourth quarter results onThursday, May 23, 2013.
According to sources, SBI could see restructuring close toRs 8000 crore for the fourth quarter.
The chunk of the restructuring for the quarter includes one large account which is Suzlon, where SBI's exposure is close to Rs 1600crore .
The other restructured accounts are mainly smaller accounts coming from sectors like infra, mid-corporates, iron and steel.
According to analysts, this high amount of restructuring could see a significant rise in provisions on restructured accounts for SBI in Q4. The Reserve Bank of India has recently enhanced provisioning requirements for banks' restructured assets, and this amount may end up being a drag on the bank's profits.
However, asset quality overall seems to have eased for the bank. Though SBI saw bad loans rise through FY13 with fresh slippages as high as Rs 10000 crore in Q2 FY13, Q4 seems to have eased the pressure. According to a person with direct knowledge, fresh slippages for the fourth quarter could be between Rs 5000-6000 crore, a figure much less than what the bank has seen in previous quarters.
Sources also say that write-offs for Q4 could be to the tune of Rs 2000 crore, and loan recoveries could amount to Rs 1000-1200 crore.
According to analysts, this high amount of restructuring could see a significant rise in provisions on restructured accounts for SBI in Q4. The Reserve Bank of India has recently enhanced provisioning requirements for banks' restructured assets, and this amount may end up being a drag on the bank's profits.
However, asset quality overall seems to have eased for the bank. Though SBI saw bad loans rise through FY13 with fresh slippages as high as Rs 10000 crore in Q2 FY13, Q4 seems to have eased the pressure. According to a person with direct knowledge, fresh slippages for the fourth quarter could be between Rs 5000-6000 crore, a figure much less than what the bank has seen in previous quarters.
Sources also say that write-offs for Q4 could be to the tune of Rs 2000 crore, and loan recoveries could amount to Rs 1000-1200 crore.
Not just that, upgradations of loans from theNPA to standard category could also be high for the quarter, at around Rs 4500-5000 crore.
Even the bank's chairman Pratip Chaudhuri has told media "NPAs for Q4 will be much lesser than Q3 and also what they saw in the previous quarters. Gross non-performing assets have come down to Rs 49,000 crore from the Rs 52,000 crore earlier in Q3 down to 4.5 per cent from 5.3% in preceding 3 months period. The bank still continues to face stressfrom contractors which are facing delay in payments, iron and steel, infra and construction sectors to name a few."
Even the bank's chairman Pratip Chaudhuri has told media "NPAs for Q4 will be much lesser than Q3 and also what they saw in the previous quarters. Gross non-performing assets have come down to Rs 49,000 crore from the Rs 52,000 crore earlier in Q3 down to 4.5 per cent from 5.3% in preceding 3 months period. The bank still continues to face stressfrom contractors which are facing delay in payments, iron and steel, infra and construction sectors to name a few."
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