Private sector banks have seen high slippages in their retail portfolio as per their fiscal first-quarter results, as loans restructured during the Covid period continued to slip into the bad loan category, Economic Times reported.
According to the report, major private banks such as ICICI Bank, IndusInd Bank, Axis Bank, and Yes Bank have reported higher slippages in retail books due to micro-loans, credit cards, and vehicle loans, but there is no cause for concern.
The second largest private lender in India, ICICI Bank, in the June quarter, reported a 50 per cent YoY growth in standalone profit at ₹6,905 crore as against a profit of ₹4,616 crore in the June 2021 quarter.
Net interest income increased by 20.8 per cent in the June quarter to ₹13,210 crore, up from ₹10,936 crore in the same period the previous fiscal. The net interest margin came in at 4.01 per cent for the June ending quarter.
However, the bank reported slippages of ₹5,037 crore in retail loans, including rural and business banking loans, in the June quarter, compared with ₹788 crore for corporate and SME loans.
At IndusInd Bank, the bulk of the total slippages of ₹2,250 crore came from the microfinance segment. Loans worth ₹1,024 crore from the MFI segment were part of the bad loan category, while commercial vehicle loans were another big contributor with bad loans of ₹486 crore.
Meanwhile, the bank posted a 61 per cent year-on-year surge in net profit at ₹1,631 crore for the first quarter of the financial year as against ₹1,016 crore in the corresponding quarter of the preceding fiscal.
For Yes Bank, out of the ₹1,072 crore of total slippages for the June quarter, ₹368 crore came from the retail segment, while the remaining was contributed by corporate and SME loans.
Further, Axis Bank reported retail slippages of Rs. 869 crore. HDFC Bank hasn't given any breakup of the date on slippages, the report said.
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