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Shocking: One-third of a bank stock you buy is going away as bad loan!
It`s not hidden from anyone that the Indian banking sector is in a great mess. The earnings numbers from the 25 banks for FY16 have clearly shown that the scenario is not very encouraging.
Zee Media Bureau
New Delhi: It's not hidden from anyone that the Indian banking sector is in a great mess. The earnings numbers from the 25 banks for FY16 have clearly shown that the scenario is not very encouraging.
The gross non-performing assets for both the private and public sector banks have increased leading to a 35 percent drop in net profit as per AceEquity.
As a result of RBI's push for the same, the provisions increased by 80 percent.
Roughly this means that NPAs of these private and public lenders accounted for one-third of market capitalisation.
It means if you are paying Rs 300 a bank stock, Rs 100 get automatically accounted as bad loans.