SBI under NPA pressure; Rs. 1,000 crore of restructured loans to slip into NPA
By Vaibhav Aggarwal
Aug 13, 2012
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The leading lender in the country, State Bank of India has predicted slippages of Rs. 1,000 to 1,100 crore of restructured loans into nonperforming asset (NPA) category. Thats nearly 3% of the bank's total restructured loan book of Rs. 36,904 crore.

Banking industry has already been struck badly by the pressure of mounting NPAs. SBI itself has seen Rs. 7,373 crore of its restructured assets turn NPA. Add to it another Rs. 1,100 crore of loans turning bad, the bank has to create 100% provisioning for the same.

"We think the eventual loss on the total restructured book will be to the extent of 3 per cent of the book (Rs 1,000-1,100 crore). That is the potential damage or loss we expect on the restructured portfolio," said Mr. Pratip Chaudhuri, SBI chief.

SBI restructured Rs. 564 crore of loans in the April-June quarter, and hopes to add Rs. 3,000 crore worth of loans in the current quarter. The bank made provisioning worth Rs. 2,790 crore, which were marginally higher than Rs. 2,782 crore it made in Q1FY12. The gross NPA ratio grew from 4.44 % in March 2012 to 4.99% ; while net NPAs grew by 40 basis points from 1.82% to 2.22%.

Slippages were mainly seen in a power sector company, highway construction company and a pharma-sector company.

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