The State Bank of India (SBI) is considering offloading a portion of its non-performing assets. The largest lender is planning to make its first deal with an asset reconstruction company this quarter.
"We are considering proposals to sell NPAs in the current quarter (Jan-Mar 2014). This is the first time we would be selling NPAs to ARCs," SBI Chairman Arundhati Bhattacharya said here on Saturday.
Reduction of NPA burden now is getting prime focus of the bank. She did not disclose any target figure but indicated that the bank was trying all avenues - recovery, restructuring or offloading – for reducing stress asset figure.
SBI's gross non-performing assets ratio in October-December quarter rose to 5.73 per cent from 5.30 per cent against the corresponding period in the previous year. The bank had restructured standard assets worth Rs 6100 crore during the Q3 of this fiscal and reportedly has a restructuring packages ready for loans of worth Rs 9,500 crore.
Regarding the stressed assets in the power sector, SBI Chairman said, "We are seeing some turnaround in the power sector”. After signing of certain FSAs (fuel supply agreements), the bank noted an appearance of stress reduction in the sector. Power sector one of the large contributors to stressed assets in the banking system.