In India’s economy, banks hold a pivotal position as the wheels that drive economic growth and financial stability. With a history dating back centuries and a modern landscape characterized by technological innovation and diversification, Indian banks play a critical role in shaping the nation’s financial infrastructure.
In this article, we will be comparing the GNPA and NPA of PSU banks YoY. Additionally, we have provided the NPA and GNPA reported by the banks for the June quarter.
GNPA (Gross Non-Performing Assets) and NPA (Non-Performing Assets) are key measures in banking to assess loan portfolio quality and risk.
High NPAs and GNPA levels indicate credit risk, impacting bank stability, profits, and capital adequacy. These metrics help evaluate loan book health, risk exposure, and credit risk management effectiveness.
On the other hand, lower NPAs and GNPA are crucial for the financial health of Banks. Monitoring and reducing NPAs are vital for sustaining a bank’s growth and reputation.
Price-to-Book Value is a financial metric used to assess the relative valuation of a company, particularly in the context of its assets.
It compares a company’s market price per share to its book value per share, which is the value of its assets minus liabilities divided by the number of outstanding shares.
|
Company Name |
CMP Rs | CMP / BV (x) | GNPA % FY23 | GNPA % FY22 | NNPA % FY23 | NNPA % FY22 | GNPA % Q1 FY24 | NNPA % Q1 FY24 |
1Yr return % |
| State Bank of India | 576.20 | 1.44 | 3.97 | 2.78 | 1.02 | 0.67 | 2.76 | 0.67 | 9.32 |
| Bank of Baroda | 193.70 | 0.95 | 6.61 | 3.79 | 1.72 | 0.89 | 3.51 | 0.78 | 55.76 |
| Punjab National Bank | 62.63 | 0.66 | 11.78 | 8.74 | 4.80 | 2.72 | 7.73 | 1.98 | 83.38 |
| Union Bank of India | 91.90 | 0.78 | 11.11 | 7.53 | 3.68 | 1.70 | 7.37 | 1.58 | 124.62 |
| Canara Bank | 334.00 | 0.77 | 5.89 | 5.35 | 1.96 | 1.73 | 5.15 | 1.57 | 43.46 |
| Indian Overseas Bank | 29.76 | 2.23 | 9.82 | 7.44 | 1.83 | 2.65 | 7.31 | 1.44 | 54.00 |
| Indian Bank | 394.05 | 1.01 | 8.47 | 5.95 | 2.27 | 0.90 | 5.47 | 0.70 | 108.98 |
| Bank of India | 87.95 | 0.59 | 9.30 | 7.31 | 2.21 | 1.66 | 6.67 | 1.65 | 75.56 |
| UCO Bank | 28.92 | 1.37 | 7.89 | 4.78 | 2.70 | 1.29 | 4.48 | 1.18 | 139.83 |
| Central Bank of India | 33.15 | 0.97 | 14.84 | 8.44 | 3.97 | 1.77 | 4.95 | 1.75 | 73.11 |
| Bank of Maha | 37.70 | 1.67 | 3.94 | 2.47 | 0.97 | 0.25 | 2.28 | 0.24 | 115.93 |
| Punjab & Sind Bank | 33.27 | 1.51 | 12.17 | 6.97 | 2.74 | 1.84 | 6.80 | 6.80 | 111.22 |
If I were to tell you, you would be surprised that all the banks mentioned above on the table have improved their GNPA from FY22 to FY23, none of the banks have seen an increase in their GNPA in FY23. Similarly, if we observe the NNPA, it also follows the same trend, and none of the banks have reported a higher NNPA in FY23 than in FY22.
There is a significant improvement in the Central Bank of India’s GNPA and NNPA, decreasing from 14.84% to 8.44% and 3.97% to 1.77%, respectively.
Looking at the Price-to-Book Value ratio of these banks, shares of the Bank of India are trading at just 0.59 times its book value, whereas the highest in this list is Indian Overseas Bank (IOB), with shares trading at 2.23 times in the market.
Observing the returns of these banks in the last year, UCO Bank tops the list by generating a return of 140%, whereas SBI has generated a mere 9%, despite being the largest bank in terms of market capitalization.
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