Banks making additional provisioning towards possible NPAs

by Nidhi Bhati

Following the Supreme Court (SC)’s order asking banks not to classify loans that were standard or stressed till 31 August 2020 as non-performing assets (NPAs) till further order, banks have started making additional provisioning for NPAs in the balance sheet for the September 2020 quarter. Experts believe that the provisioning requirements for banks may go up 20-50 per cent in the September 2020 quarter due to the SC standstill order. Meanwhile, the central government is putting all efforts to pass on the benefits of the compound interest waiver to small borrowers before 2 November 2020. The Centre’s decision to fund the compound interest payment will come at a cost of Rs.65 billion, a government official told Business Standard.

References
1. https://www.business-standard.com/article/economy-policy/centre-to-ensure-interest-waiver-benefits-to-small-borrowers-by-nov-2-120101900040_1.html
CMIE STATISTICS
Unemployment Rate (30-DAY MVG. AVG.)
Per cent
6.6 0.0
Consumer Sentiments Index
Base September-December 2015
51.8 -0.3
Consumer Expectations Index
Base September-December 2015
53.6 -0.6
Current Economic Conditions Index
Base September-December 2015
48.9 0.0
Quarterly CapEx Aggregates
(Rs.trillion) Dec 19 Mar 20 Jun 20 Sep 20
New projects 5.55 3.97 0.78 0.76
Completed projects 1.66 1.78 0.25 0.69
Stalled projects 0.61 0.73 0.11 0.08
Revived projects 0.83 0.42 0.68 0.34
Implementation stalled projects 0.13 10.02 0.09 0.03
Updated on: 01 Dec 2020 9:28AM
Quarterly Financials of Listed Companies
(% change) Dec 19 Mar 20 Jun 20 Sep 20
All listed Companies
 Income -1.7 -5.0 -27.6 -6.2
 Expenses -2.2 -1.9 -27.9 -10.1
 Net profit -10.9 -48.2 -40.2 45.3
 PAT margin (%) 5.1 2.4 5.3 8.3
 Count of Cos. 4,459 4,315 4,300 4,198
Non-financial Companies
 Income -5.5 -9.0 -37.4 -10.3
 Expenses -6.4 -5.0 -37.6 -14.0
 Net profit -13.9 -49.4 -55.7 30.0
 PAT margin (%) 5.7 3.3 4.5 8.1
 Net fixed assets 13.3 6.0
 Current assets 3.0 0.7
 Current liabilities 5.7 -2.9
 Borrowings 15.7 8.1
 Reserves & surplus 1.5 4.5
 Count of Cos. 3,312 3,229 3,221 3,160
Numbers are net of P&E
Updated on: 01 Dec 2020 9:28AM
Annual Financials of All Companies
(% change) FY18 FY19 FY20
All Companies
 Income 8.4 13.4 0.3
 Expenses 9.9 13.7 0.9
 Net profit -40.5 21.9 -18.3
 PAT margin (%) 2.0 2.3 4.2
 Assets 10.9 9.5 9.3
 Net worth 7.5 8.6 4.8
 RONW (%) 3.5 4.2 6.0
 Count of Cos. 28,425 27,638 6,888
Non-financial Companies
 Income 8.7 13.9 -2.8
 Expenses 8.8 14.1 -1.7
 Net profit -9.1 23.0 -27.7
 PAT margin (%) 2.7 3.1 4.4
 Net fixed assets 7.2 5.5 13.2
 Net worth 6.1 8.4 1.7
 RONW (%) 5.6 6.8 7.5
 Debt / Equity (times) 1.0 1.0 0.8
 Interest cover (times) 2.1 2.4 2.8
 Net working capital cycle (days) 77 70 57
 Count of Cos. 23,077 22,402 5,084
Numbers are net of P&E
Updated on: 28 Nov 2020 11:22AM