Union Bank, Oriental Bank report higher NPA

ubiUnion Bank of India, one of India’s biggest government-owned banks, said non-performing assets — bad loans to the layman — rose to 7.05% of its loanbook as on December 31, 2015 from against 6.12% three months earlier.

A year ago, NPAs, on a gross basis, was 5.08%.

On a net basis, NPA ratio was at 4.07% as on December 31, up from 3.39% three months earlier and 2.95% a year earlier.

Non-performing assets, or bad loans, are hogging all the attention these days due to a steep increase in such loans in the last two years.

With the economy not doing as well as it used to, and disbursal and recovery laws not as strict, companies are defaulting on their loans like never before.

As a result of the increase, the bank’s provision Coverage ratio fell to 55% from 57.85% three months earlier.

Recently, Allahabad Bank reported gross NPA ratio if 6.40% vs 5.46% in the same period last year, while IOB reported 12.64% and PNB posted gross non-performing assets of 8.47%.


Meanwhile, Oriental Bank of Commerce also reported an increase in Gross NPA to 7.75% from 5.7% at the end of the previous three months.