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CareEdge Research Report
Gross non-performing assets of scheduled commercial banks reduced by 21.1% YoY to Rs 4.85 lakh crore as of December 31, 2023, due to lower slippages, steady recoveries and upgrades, and some write-offs. Meanwhile, advances grew by 20.3% YoY in the same period. The GNPA ratio of SCBs reduced to 3.0% as of December 31, 2023, from 4.6% over a year ago.
Net non-performing assets of SCBs reduced by 28.1% YoY to Rs. 1.09 lakh crore as of December 31, 2023. The NNPA ratio of SCBs reduced to 0.7% from 1.2% in Q3FY23 which is an all-time low.
Restructured assets for select 10 PSBs reduced by 16.6% YoY to Rs. 0.97 lakh crore as of December 31, 2023. Meanwhile, restructured assets of selected five private banks declined by 37.6% to Rs. 0.11 lakh crore due to repayments made by the borrowers, an uptick in the economic activities and slipping some accounts into the NPAs.
Restructured assets (Ten PSBs + Five PVBs) as a percentage of net advances stood at 0.8% as of December 31, 2023, dropping by approximately 50 bps over a year ago period.
The provision coverage ratio of SCBs expanded by 289 bps YoY to 77.4% Q3 FY24 mainly due to improvement in overall asset quality.
SCBs credit cost (annualised) declined by 35 basis points (bps) YoY to 0.38% in Q3 FY24. Besides, it has been generally trending down from 0.87% in Q3 FY22. PSBs have been holding substantial buffers for provisions over the last six-eight quarters along with continuous improvement in the asset quality required a lower level of incremental provisioning, resulting in lower credit cost.
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