Power Sec­tor will Con­tinue to Trou­ble Pri­vate Banks

Power sec­tor stress con­trib­utes nearly 17% of the over­all debt of banks; next round of fresh slip­pages may also em­anate from the sec­tor

The Economic Times - - Smart -

ICICI bank, which has the high­est ex­po­sure to the sec­tor in ab­so­lute terms of about ₹ 45,000 crore, or 4.8% of its loan book, recorded an ad­di­tion of ₹ 1,420 crore to its watch list from a power ac­count clas­si­fied be­low in­vest­ment grade in the June quar­ter. With this slip­page, the to­tal out­stand­ing ex­po­sure to power sec­tor in the watch list stands at ₹ 7,076 crore, the high­est for any in­dus­try.

ICICI Bank has ac­knowl­edged that given the stress in the steel and power sec­tors, slip­pages from in­vest­ment grade to be­low in­vest­ment grade can­not be com­pletely ruled out.

The stress in the power sec­tor has also re­flected in the June quar­ter num­bers of mid-sized pri­vate sec­tor lender Yes Bank. While the bank has cut its power and elec­tric­ity ex­po­sure to 10.6% in June from 11.3% in March and only 2% of its to­tal ex­po­sure is non-op­er­a­tional, it has in­di­cated that the stress in the sec­tor is high and it will con­tinue to ad­just risk in the port­fo­lio by steps like sell-down of loans.

10.6 5.2 4.8 3.5 14,837 25,621 45,235 4,074

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.