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Retail asset quality shows stress signs

Auto loan NPAs have increased six basis points to 1.16 per cent from 1.10 per cent in June 2019.

, ET Bureau|
Dec 12, 2019, 08.21 AM IST
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Bankers said the rise in retail NPAs is a reflection of the current tough economic environment which is impacting individual borrowers.
Mumbai: Retail asset quality is showing signs of stress as individual borrowers are delaying payments especially in auto, twowheeler and loans taken to buy consumer durable products, data from credit rating CRIF High Mark shows.

Interestingly, asset quality in the larger retail segments such as credit cards, housing loans and personal loans has remained stable. Housing loan NPAs increased slightly to 0.71 per cent in the September quarter from 0.70 per cent in the June quarter, while credit card NPAs dipped to 1.80 per cent from 1.85 per cent and personal loan NPAs fell to 0.63 per cent from 0.67 per cent in June.

There has been an uptick in nonperforming assets (NPAs) for auto, consumer durable and twowheeler loans in the quarter ended September versus the June quarter, according to the data accessed by ET. Two-wheeler loans have seen the biggest jump in loans due past 90 days at 23 basis points to 2.74 per cent in September 2019 from 2.51 per cent in June 2019, the data shows. One basis point is 0.01 percentage point. On a year-on-year basis too, two-wheeler loans showed the maximum deterioration with NPAs at 2.74 per cent in September 2019 up from 2.15 per cent in September 2018. Housing loan NPAs have also increased to 2.26 per cent from 2 per cent a year ago while auto loan NPAs have increased to 1.16 per cent from 1.02 per cent a year ago.
npa-graph

CRIF High Mark analysed total retail loan portfolio of Rs 36,600 crore which has increased 5.5 per cent from Rs 34,690 crore recorded in the quarter ended June 2019. Overall NPAs increased by 4 basis points to 1.02 per cent in September 2019 from 0.98 per cent in June 2019. Besides twowheeler loans, there has been a 19 basis points increase in NPAs for consumer durable loans to 2.11 per cent in September 2019 from 1.92 per cent in June 2019. Auto loan NPAs have increased six basis points to 1.16 per cent from 1.10 per cent in June 2019.

Bankers said the rise in retail NPAs is a reflection of the current tough economic environment which is impacting individual borrowers. “The repayment capacity of some borrowers has been impacted due to job losses. The NBFC crisis also has a role to play especially in consumer durable loans which they dominate because their collection capacity has been hit. In auto loans many of them would be commercial loans like taken by taxi drivers,” said Virendra Sethi, head retail loans, Bank of Baroda.

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