Canara Bank expects its non-performing assets (NPAs) to decline in the third and fourth quarters. The bank had recorded an improvement in loan quality in the second quarter of this fiscal.
R.K. Dubey, Chairman and Managing Director of Canara Bank, said the sequential improvement in asset quality and decline in NPAs are likely to continue in the second half of the current fiscal.
In the second quarter, most of the state-run banks saw their gross as well as net NPAs rise over the first quarter as a percentage of total loan, except for Canara Bank and Bank of India, which reported a fall in both gross and net NPA ratios.
Canara Bank’s gross NPAs in the second quarter fell 27 basis points sequentially to 2.64 per cent while net NPAs dropped 18 bps to 2.30 per cent.
Monitoring recovery
“I hope that in my bank the trend of declining gross NPA is likely to continue in the third as well as the fourth quarters of this financial year…asset quality should not deteriorate further. We don’t want it to deteriorate further like in some major banks where you might have noticed it is now touching 4 to 5 per cent or even at 7 per cent,” Dubey said.
The bank was now controlling slippages by aggressive credit monitoring of existing accounts and stressing on recovery.
“We have put three general managers for recovery. With credit growth going up, recovery going up and slippages going down, I hope this trend should continue,” he said.
Dubey said the bank’s restructuring pipeline was not going to impact the asset quality in the third as well as the fourth quarters for its stringent corporate debt restructuring (CDR) norms. He said the bank had made “adequate provisioning” for bad loans.