Coal news and updates

SBI sees coal FSAs as stress reliever for power loans

Bank considering selling non-performing assets during the quarter

The country's largest lender, State Bank of India (SBI), on Saturday said the stress on its power-sector loans was likely to ease following the coal FSAs (fuel supply agreements) being signed. But it said it would be cautious on further lending.

“We are seeing some turnround in the power sector,” Arundhati Bhattacharya, chairperson, said. As of the December quarter, the public sector bank had loaned the infrastructure segment Rs 134,880 crore.

“New projects have to come for fresh loans.”

“The bank is considering selling non-performing assets (NPAs) during this quarter. This is the first time we would be selling NPAs to ARCs (asset reconstructing companies),” she said, adding NPA reduction was the main focus at the moment.

Gross NPA ratio rose to 5.7 per cent during the December quarter compared to 5.3 per cent a year ago, and 5.6 per cent in the September quarter. Net NPA ratio increased to 3.2 per cent in the December quarter from 2.6 per cent a year ago, and 2.9 per cent in the September quarter.

“We have raised capital and are not raising any more as we are adequately capitalised.”

Capital adequacy ratio was 11.6 per cent in December compared to 11.7 per cent in September.

Source: Business Standard