IDBI Bank tops list of banks with high NPAs

IDBI Bank, which is the target of an acquisition move by the Life Insurance Corporation of India, has emerged as the bank with highest proportion of bad loans among public sector banks in India.

As of the end of 2017-18, IDBI Bank had a gross non-performing asset percentage of 28%.

In other words, out of every 100 rupee lent by the bank, 28 was not coming back. This was nearly double the NPA level of the public sector banking sector as a whole, which was at 14.6%.

IDBI Bank also had the dubious distinction of have the second biggest loss for the financial year, at Rs 8,238 cr.

The highest loss for the financial year was recorded by Punjab National Bank, which recorded losses of Rs 12,283 cr. The percentage of Non Performing Loans or NPA ratio at PNB was 18.4%.

State Bank of India, the country’s largest bank, had a gross NPA ratio of 10.9%.

Next to IDBI Bank in terms of NPAs was Indian Overseas Bank, with nearly 25.3% of its loans not coming back.

It was followed by UCO Bank (24.6%) and United Bank of India (24.1%) (see chart above).

The lowest NPA ratio was reported by the Karnataka-based Vijaya Bank at 6.3%, followed by Indian Bank at 7.4%.

In terms of operating profit — a measure of cash produced by the company before accounting for losses — IDBI Bank was at the fifth position out of the total 21 banks in India.

In terms of operating profit, the highest number was posted by SBI at Rs 59,511 cr, followed by Bank of Baroda at 12,006 cr, PNB at 10,294 cr and Canara Bank at Rs 9,548 cr.

The government has announced its intention to step down from its position as the lead shareholder in IDBI Bank by selling the stake to Life Insurance Corporation of India or LIC. However, the move has been opposed by both LIC policy holders as well as IDBI Bank employees.