Bank NPAs and Data Book II
Indian Banks have amongst the highest Non-Performing Loans (relative to their Loan book) when compared to other Emerging Economies (EMs). As of March-21 the NPA’s of Indian Banks were 7.5% of their gross loans as compared to the average of just 3% for a sample of 8 other EMs.
But directionally, since the start of this pandemic, the NPAs of Indian Banks have declined while for most of these EMs NPAs have seen a slight increase. As of December-2019, just before the start of the pandemic, NPAs of Indian Banks were 9.2% of gross loans. This has decreased to 7.5% as of March-2021 – a decrease of 170bps. The only other country (from within this sample) which has seen a large decrease in NPAs is Turkey – 140bps during this period.
More importantly, the pandemic does not seem to have materially impacted the asset quality of Banks in most EMs. Barring the Philippines and South Africa where NPAs have increased by over 100bps between Dec-2019 to Mar-2021, NPAs have either risen by less than 50bps or even decreased.
So either the pandemic has not impacted businesses as badly as feared (possibly due to fiscal support) or there has been regulatory forbearance across most EMs in terms of delayed or liberal recognition of NPAs.
Data Book - II
PS: The second in our Data Book series of Books goes live later this week. This book covers the States of India, through data, with 3 sections and 10 chapters in each section.
BW Businessworld @BWBusinessworldData Book 2021: State of States - Available Online Next Week. Watch this space for more @anuragbatrayo @tanvieahuja @IndiaDataHub https://t.co/W0VQcayyam
It covers a range of topics from Demographics to the Financial Sector to State Government Finances to Infrastructure and many more. Look out for a detailed email on the book and a few sample pages tomorrow.