DSIJ.in JULY 22 - AUG 4, 2019 I DALAL STREET INVESTMENT JOURNAL (^49)
engineering sectors too gained in pace. However, the credit
growth to basic metal and metal products, textiles and food
processing dropped. Personal loans rose 16.7 per cent in FY19.
During FY19, public sector banks such as SBI, Bank of Baroda,
Canara Bank and Indian Bank reported double digit growth in
net interest income (NII). During the year, Canara Bank showed
the biggest growth in the NII, which is the difference between
total interest income and total interest expense. It also reported
profit of 547 crore during FY19 as compared to4000 crore loss
in FY18. Improved asset quality and strong advances further
pushed the NIM to 2.04 per cent from 1.93 per cent.
Punjab National Bank, though, suffered loss for another year.
The net loss for FY19 stood at 10026.41 crore as against 12584.33 crore in FY18. The bank was in the news for alleged
scams worth 14,000 crore approx. Indian Bank said that it would also focus on fund raising which would bring down the stake of the government below 75 per cent as per regulatory guidelines. In FY19, the bank’s business touched4.29 lakh crore, while overall deposits grew to 2.42 lakh crore along with the advances to1.87 lakh crore. On the
asset quality front, gross NPAs and net NPAs were reduced to
7.11 per cent and 3.75 per cent, from 7.37 per cent and 3.81 per
cent, respectively in comparison to the last fiscal.
Overall, PSBs saw improved trend in NII. The net income of
these banks either grew or improved from the lows of earlier
year. Among private banks, HDFC Bank continues to be the
leader. It again saw robust NII growth. Its NII for FY19
increased by 23 per cent to 105160 crore as compared to 85287 crore in FY18. Some of the private banks with highest
exposure to the stressed assets such as ADAG group, Jet
Airways, IL&FS and corporate lending faced pressure on
financial performance. Yes Bank’s net profit for the year
declined by 60 per cent to 1709 crore. The major reason was the write-offs by the bank. The bank's profit narrowed sharply in Q4FY19 where it reported provisioning of around 1500
crore. The bank also stated that it can recognize further stressed
assets worth `10000 crore in FY20. This news created sharp
sell-off in the scrip. The bank's GNPA ratio stood at 3.22 per
cent, which rose from 1.28 per cent in the lprevious fiscal.
Outlook
The asset quality, which was a major concern for FY19, can be
expected to be moderate. Fresh NPAs in the sector are expected
to moderate around 1.9 to 2.4 per cent in FY20 due to
aggressive recovery and write-offs by banks. The public sector
banks can be expected to turn profitable after four successive
years of losses. Further, the capital infusion announced by the
government in the latest Union budget is also set to boost the
sentiment in the industry. Fresh NPA generation stood at 3.7
per cent for FY19. Going ahead, strong monsoon across the
country can provide the much-needed boost to the sector.
Advances GNPA NIM FY19 YoY Growth
FY19 FY18 FY17 FY19 FY18 FY17 FY19 FY18 FY17 NII (%) Advances (%) PAT (%)
869222.66 700033.84 585480.99 1.36 1.30 1.05 3.97 3.88 3.94 23.30 24.17 20.93
2226853.67 1960118.54 1896886.82 7.53 10.91 6.90 2.50 2.27 2.36 10.64 13.61 NA
243461.99 205997.32 167124.91 1.94 1.95 2.25 3.73 3.74 3.93 19.11 18.19 15.82
646961.68 566854.22 515317.31 6.70 8.84 7.89 2.64 2.48 2.64 15.80 14.13 -37.48
506656.12 449843.65 381164.67 5.26 6.77 5.04 2.72 2.70 3.00 20.23 12.63 987.66
144953.66 113080.51 88419.34 2.10 1.17 0.93 3.18 3.38 3.39 28.82 28.19 -8.46
484214.81 437941.26 392262.30 9.61 12.26 10.46 2.48 2.25 2.06 14.87 10.57 NA
462416.23 438825.78 424230.49 15.50 18.38 12.53 2.21 1.95 2.09 7.02 5.38 NA
342966.34 343288.92 368328.76 15.84 16.58 13.22 2.18 1.72 1.89 7.03 -0.09 NA
171739.95 190825.93 215893.45 27.47 27.95 21.25 1.81 1.62 1.88 -4.10 -10.00 NA
54308.24 40267.84 29449.04 1.38 1.40 1.20 3.16 2.94 2.50 38.16 34.87 34.75
428114.77 382074.58 342320.14 8.87 11.88 9.66 2.04 1.93 1.66 13.43 12.05 NA
111535.92 93010.89 74086.23 2.92 3.00 2.33 2.69 2.64 2.71 17.35 19.92 40.99
86302.29 52164.89 49401.68 2.43 3.31 2.99 2.07 1.56 1.84 34.13 65.44 NA
241397.19 203518.83 132262.68 3.22 1.28 1.52 2.57 2.47 2.69 46.16 18.61 -59.62
142212.17 152060.74 150752.69 17.55 15.96 13.09 2.22 1.88 2.23 3.15 -6.48 NA
121251.21 119868.84 140356.79 15.35 0.00 11.70 2.57 2.18 1.79 -11.38 1.15 NA
298780.10 290571.51 287949.83 15.01 15.73 11.17 2.08 1.93 1.98 4.13 2.82 NA
181261.91 156568.93 127707.71 7.11 7.37 7.47 2.50 2.47 2.35 12.08 15.77 -74.59
205044.40 210683.87 199669.35 11.37 11.53 8.50 2.12 2.01 2.08 -0.23 -2.68 NA
146525.36 156542.18 139398.77 19.29 21.48 17.81 2.05 2.00 1.97 -5.81 -6.40 NA
82666.21 85797.28 95515.23 16.40 19.48 16.93 2.26 2.16 1.99 -2.22 -3.65 NA
158847.91 149085.88 136870.92 16.21 17.09 0.00 2.74 2.66 2.53 5.46 6.55 NA
56912.74 49816.11 50193.29 8.97 9.96 11.20 3.20 3.06 3.37 15.92 14.25 5.44
martin jones
(Martin Jones)
#1