Sunday, July 27, 2014
State-run banks that declared their first-quarter earnings on Friday—Punjab National Bank (PNB), Indian Bank, UCO Bank and Allahabad Bank—reported mixed results in terms of profitability, but pressure on asset quality continued to be a general concern. New Delhi-based lender PNB reported a 10.2% rise in net profit to Rs.1,405 crore in the June quarter, from Rs.1,275 crore a year earlier, aided by a rise in net interest income. Net interest income rose 12.1% to Rs.4,380 crore, from Rs.3,908 crore. Other income, however, contracted 8% to Rs.1,236 crore, from Rs.1,342 crore, mainly due to lower trading profits. Net interest margin (NIM), a key measure of profitability, fell to 3.42% from 3.52%. In an indication of the worsening asset quality, non-performing assets (NPA) ratios worsened both on a year-on-year basis and sequentially. Gross NPAs rose to 5.48% in the quarter from 4.85% last year and 5.25% from the previous quarter. Net NPAs also rose to 3.02% from 2.98% last year and 2.85% as of March end. Total provisions rose 1.3% to Rs.1,720 crore. But provisions for bad debts almost doubled to Rs.1,336 crore, from Rs.675 crore. The bank’s restructured book stood at Rs.3,4012 crore as of June end. More than 40% of the restructured accounts were in the infrastructure space, especially power, reflecting the problems faced by the power sector in acquiring coal. In the quarter, the bank restructured 40 accounts, amounting to Rs.1,452 crore. K.R. Kamath, chairman and managing director of the bank, said the bank is hopeful that the NPA situation will improve in the coming quarters. “With an improvement in the economy, the pressure on asset quality should ease. Meanwhile, we will continue to focus on better recovery and upgradation of bad debts,” he said. The bank will be prepared to meet the credit demands of an economy where optimism is picking up, he said. “We hope to go back to our normal trend of credit growth but without compromising on the quality.” While advances grew 13.9% to Rs.3.47 trillion, deposit growth was at 12.1% at Rs.4.44 trillion. Saday Sinha, banking analyst at Kotak Securities Ltd, said in a note that PNB’s stressed asset book is 13% of its loan book, much higher than the industry average. Meanwhile, Chennai-based Indian Bank reported a fall of 53% in net profit for the June quarter to Rs.207.15 crore, compared with Rs.317.39 crore a year ago. The bank’s net interest income was Rs.1,072 crore, a 2% decline year-on-year. NIM was lower by 9 basis points to 2.46% quarter-on-quarter. One basis point is one hundredth of a percentage point. Total bad debts were up 4% sequentially. The bank saw its gross NPA ratio build up to 4.01% in the quarter compared with 3.41% a year ago. The net NPA moved up to 2.48% from 2.31% a year ago. NIM moved up slightly to 2.44 % for the first quarter from 2.31% a year ago. Kolkata-based lender UCO Bank’s net profit was up marginally by 2% to Rs.521 crore, from Rs.511 crore a year ago. Asset quality, however, improved sharply with gross and net NPAs falling to 4.31% and 2.33%, respectively, from 5.58% and 3.15%. Another Kolkata-based lender, Allahabad Bank, saw its net profit plummeting 73% to Rs.113 crore from Rs.413 crore in the year-ago period, as provisions almost doubled to Rs.852 crore from Rs.445 crore. While gross NPAs rose to 5.48% from 4.78%, net NPAs were up to 3.88% from 3.87%.
Saturday, July 26, 2014
A broader matter is public health. Open defecation is disastrous when practised by groups in close contact with each other. Because India’s population is huge, growing rapidly and densely settled, it is impossible even in rural areas to keep human faeces from crops, wells, food and children’s hands. Ingested bacteria and worms spread diseases, especially of the intestine. They cause enteropathy, a chronic illness that prevents the body from absorbing calories and nutrients. That helps to explain why, in spite of rising incomes and better diets, rates of child malnourishment in India do not improve faster. Unicef, the UN’s agency for children, estimates that nearly one-half of Indian children remain malnourished.The costs are high. Public safety is one underappreciated problem, as young women have to leave their rural homes after dark. In May two teenage girls in Uttar Pradesh visiting a field used as a communal toilet were raped, murdered and strung up from a tree. That case won notoriety for its extreme barbarity, but similar attacks are distressingly common.