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Published: Thu, October 27, 2016
Economy | By Melissa Porter

Indian private sector banks reap Q2 profit boost; bad loans ease

Indian private sector banks reap Q2 profit boost; bad loans ease

In Q2FY17, the bank's net profit stood at Rs 55.5 crore as against Rs 119.5 crore during the same period a year ago.

Kotak Mahindra Bank, the fourth-biggest private sector bank by assets, said second-quarter net profit rose 43 percent from a year ago to 8.13 billion rupees.

The bank's asset quality slipped with gross non-performing assets (NPAs) or bad loans more than doubled to 9.81 % of gross advances during the reported quarter, from 4.27 % a year ago. The Net NPA also increased to 5.03 per cent as against 2.37 per cent during the same period a year ago. Syndicate Bank had made provision and contingencies of Rs.934 crore during the Q2 as against Rs.877 crore in the same period past year.

The spread on loans over the cost of borrowings for the half-year ended September 30, 2016 stood at 2.28 per cent compared with 2.26 per cent for the quarter ended June 30, 2016. The bank had posted a net profit of Rs 1,915.64 crore for the July-September period of FY2015-16. However, in the previous quarter, gross NPA was 11.92%.

Axis Bank's watch list loans reduced 32 percent quarter on quarter and was recorded at Rs 13,789 crore as on September 30 last month, the lender said in a statement. The non-performing loans of the individual portfolio stood at 0.61 per cent while that of non-individual portfolio stood at 1.11 per cent. Its gross bad-loan ratio narrowed to 2.49 percent at end-September, from 2.5 percent at end-June. The bank reported 53.5% drop in net profit during the quarter.

"We now believe that slippage from the "watch-list" may be higher than the 60 per cent we had originally envisaged", Sridharan told reporters on a conference call after the announcement of the results post market hours.

The provision-coverage ratio has improved from 41 per cent as on September 30, 2015, to 52 per cent as on September 30 this year. Shares of the bank closed at Rs 78.25 on BSE, up 0.06 per cent over the previous day.

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