Page 6 - Banking Finance December 2021

BANK UPDATE

K V Kamath to head "Two things have happened in the last proved sequentially on a consolidated
quarter - one is that recoveries from basis.
NABFID large corporate bad loans are catching
The Centre has appointed veteran up like we saw with the completion of Index heavyweight's profit surged al-
most 73 per cent to Rs 1146.7 crore in
banker KV Kamath as the Chairperson the DHFL resolution," said Rajiv Anand, Q2FY22 as compared to 663.1 crore in
of the National Bank for Financing In- deputy managing director at Axis Bank. the same quarter a year-ago period.
frastructure Development (NABFID), Similarly, NII grew nearly 12 per cent
the newly set up development finance PNB profit soars 78% to to Rs 3658.4 crore in the second quar-
institution in the country.
Rs. 1.105 crore ter of FY22 as against Rs 3278 crore in
Kamat will chair a board comprising 13 the corresponding quarter in FY21.
members, including a chairman, four State-owned Punjab National Bank
(PNB) reported a 78 per cent rise in The bank's asset quality improved too
whole-time directors and two govern-
net profit to Rs 1,105 crore for the as gross non-performing assets (NPA)
ment nominees. The remaining are
second quarter ended on September came at 2.77 per cent versus 2.88 per
expected to be independent directors.
30 despite a fall in income. cent quarter-on-quarter (QoQ) and net
It may be recalled that the Parliament NPA stood at 0.80 per cent versus 0.84
had, in March this year, passed a Bill The country's second-largest lender per cent sequentially, IndusInd Bank
to set up NABFID to fund infrastruc- had posted a net profit of Rs 620.81 said in its earning statement.
ture projects in the country. crore during the corresponding quar-
ter a year ago.
The bank has been set up to support Indian Banks' Association
However, the bank's total income dur-
the development of long-term, nonre- ing the July-September quarter de- welcomes move
course infrastructure financing in India,
including development of the bonds clined to Rs 21,262.32 crore as against The Finance Ministry's decision to ask
and derivatives markets necessary for Rs 23,279.79 crore in the correspond- public sector banks to complete staff
infrastructure financing and to carry on ing period last year, PNB said in a regu- accountability exercise within six
the business of financing infrastruc- latory filing. months from the date of classification
ture. The bank's operating profit too de- of an account as a non-performing as-
set (NPA), will boost the morale of
clined to Rs 4,021.12 crore from Rs
In his over five-decade long career, employees, according to the India
5,674.91 crore in the same quarter in
Kamath has served as the head of sev- Banks' Association (IBA). At present,
eral top-notch banking institutions and the previous financial year.
different banks are following different
companies. On the asset quality front, the lender's
procedures for conducting staff ac-
gross non-performing assets (NPAs) in- countability exercise. Also, staff ac-
Banks see sharp rise in creased marginally to 13.63 per cent countability exercise is being carried
of the gross advances at the end of
bad loan recoveries in Q2 September 2021, from 13.43 per cent out in respect of all accounts which
ICICI Bank, Axis Bank, State Bank of a year ago period. Net NPAs also in- turn NPA
India and Punjab National Bank (PNB) creased to 5.49 per cent as against "This approach not only affects staff
have all reported a sharp rise in bad 4.75 per cent a year ago. morale but also puts a huge strain on
loan recoveries in the second quarter, the bank's resources. While punitive
largely due to improvement in retail Induslnd Bank net jumps action need to be taken against the
collections that had fallen sharply in officers having malafide intent/involve-
the first quarter through the second 73% ment, it is essential to ensure that
wave of Covid 19. IndusInd Bank reported robust bonafide mistakes are dealt with com-
Bankers and analysts said the improve- second-quarter earnings for the finan- passion," per the IBA statement.
ment in recoveries is another indicator cial year 2021-22 (Q2FY22) on a year- It said that when the country is in need
of improving consumer sentiment and on-year (YoY) basis in both profit and of an economic boost, slow credit de-
is a start of better asset quality for net interest income (NII) terms, as well livery is a matter of concern and needs
banks in the immediate future. as the bank's asset quality too im- to be addressed. T

6 | 2021 | DECEMBER | BANKING FINANCE