Page 6 - Banking Finance June 2024

BANK UPDATE

IOB to sell 92 NPAs worth that the gross NPA will come down Canara Bank net jumps
further. We expect that it would be
Rs. 13000 crore, among below Rs 6,000 crore at the end of this 18%
biggest sales current fiscal as per current trends," Public sector lender Canara Bank re-
In one of the largest sale of bad loans, UCO Bank MD and chief executive of- ported a healthy set of numbers for
state-owned Indian Overseas Bank has ficer Ashwani Kumar said. the fourth quarter of the past fiscal
announced the sale of 92 NPA loans The bank reported a 9.5% year-on-year with a record net income for the re-
with a collective value of Rs 13,471 fall in its standalone net profit at Rs 525.7 porting period as well as for the full-
crore. The bank has also made the list crore for the fourth quarter last fiscal as year logging in over 18% year-on-year
of non-performing accounts public, operating profit declined. It had posted profit at Rs 3,757 crore for the three
which includes Videocon, Lanco, IL&FS a net profit of Rs 581.2 crore for the months ending March
Financial Services, Jet Airways and Re- fourth quarter of FY '22-'23. For the full fiscal year 2023-24, the
liance Communications. The bank is planning to invest around Bengaluru-based bank booked 37.25%

According to IOB's list, Videocon Indus- Rs 1,000 crore in this financial year to more net profit at Rs 14,554 crore as
tries, Videocon Oil Ventures and bolster its IT infrastructure and mod- against Rs 10,604 crore in FY23, its
Videocon Telecommunication collec- ernize IT systems related to treasury managing director and chief executive
tively accounted for an outstanding book operations. In the last financial year, it Satyanarayana Raju told.
of Rs 1,486 crore as on March 31, 2024. had spent around Rs 700 crore for the Raju said, the bank has exceeded al-
Next is a collective outstanding book of purpose. most all its targets set in the beginning
Lanco Infratech, Lanco Babandh Banks could boost rev- of the year be it in terms of net profit,
Power, Lanco Resources International net interest margin or bad loans and
and Lanco Vidarbha Thermal Power at enue by 600 bps with recoveries from them or for that mat-
nearly Rs 1,283 crore. The bank called GenAI: Accenture ter credit and deposit growth rates.
for expressions of interest from asset Banks can significantly increase em- While the key profitability metric net
reconstruction companies and other ployee productivity and revenues by interest margin rose to 3.05% up by 10
lenders to transfer the NPA accounts incorporating generative AI (GenAI) in bps, as against the target of 2.75-3%,
offered on a portfolio basis in two lots their operations, according to a report bad loans declined steeper than
through e-auction. by IT company Accenture. planned with the gross NPA ratio fall-
The first portfolio comprises 46 accounts Accenture analysed publicly available ing by 112 bps to 4.23 and the net NPA
financed under consortium arrange- employee data to estimate the impact ratio declining by 46 bps to 1.27.
ments, three accounts under multiple of generative AI on banking tasks. The
banking arrangements and the remain- company modelled the financial impli- Conditions in India shap-
ing two accounts being sole banking ven- cations for over 150 large banks glo-
tures, IOB said in a statement. bally, including Indian public and pri- ing up for an upshift in
vate sector banks, over a three-year real GDP growth: SBI Chief
UCO Bank plans to bring period. State Bank of India (SBI) Chairman

down gross NPA below Rs. "Banks that move quickly to scale gen- Dinesh Khara said conditions in India
erative AI across their organisations are shaping up for an upshift in real
6000 crore could increase their revenues by up to GDP growth aided by robust invest-
Public sector lender UCO Bank is plan- 600 bps (basis points) in three years," ment demand and an improvement in
ning to bring down the amount of gross the research revealed. business and consumer sentiments.
non-performing assets (NPA) to below
Banks which effectively adopt and The lender expects to maintain a credit
Rs 6,000 crore by this fiscal-end. At the scale generative AI could increase growth of 14-16 per cent in the finan-
end of last fiscal, it was Rs 6,463.3 employee productivity by up to 30 per cial year 2025, with momentum con-
crore. cent by streamlining numerous lan- tinuing in retail and corporate loans, he

"Recovery and upgradation will ensure guage-related tasks, it said. said.

6 | 2024 | JUNE | BANKING FINANCE