GET Stock QuotesNews18 APP
News18 English
Powered by cricketnext logo
»
2-min read

State-Run Banks to Retain Loan Market Share at 51% Medium Term

Loan market share of public sector banks which are not under the PCA are expected to be maintained at 50-51 per cent while private sector banks are expected to increase it from 30.9 per cent in March 2018 to 38-40 per cent in the foreseeable future and stabilise at that levels

PTI

Updated:July 25, 2018, 7:48 PM IST
facebookTwittergoogleskypewhatsapp
State-Run Banks to Retain Loan Market Share at 51% Medium Term
Image for representation only.
Loading...
Mumbai: The state-run banks which are not under the prompt corrective action (PCA) framework are expected to maintain their loan market share at 50-51 per cent in the near future, while the overall credit growth is likely to be 8-9.5 per cent in the next two years, says a report.

"Loan market share of public sector banks which are not under the PCA are expected to be maintained at 50-51 per cent while private sector banks are expected to increase it from 30.9 per cent in March 2018 to 38-40 per cent in the foreseeable future and stabilise at that levels," Icra said in a report on Wednesday.

The Reserve Bank has since end-FY17 been tagging badly performing state-run banks under the PCA framework and so far as many as 11 of them are under this. Being under the PCA means such banks cannot engage in fresh corporate lending and can mostly perfrom deposits and recoveries only.

The RBI started this punitive action these bank's bad loans ballooned to high double digit levels.

The report said with the expected resolution under the bankruptcy code, the asset quality for all state-run banks is expected to improve over next couple of years.

Improvement in recoveries and capital infusion may help them come out of the PCA framework and stabilise their market share, though at lower levels of 9-12 per cent.

Depending on capital position, state-run banks under PCA may start posing competition for private sector banks from FY21 onwards restricting the market share gain by the latter.

Icra's financial sector ratings head Anil Gupta said despite being faced with lingering asset quality concerns, dwindling profitability and capital constraints, the state-run banks not under the PCA managed to hold on to their loan market share at around 50-51 per cent for the past two years.

Private sector ones were able to gain market share in advances to 30.9 per cent as of March 2018 from 25.8 per cent as of June 2016 primarily at the expense of the NPA laden state-owned banks whose market share declined to 18.6 per cent from 23.3 per cent during this period.

Unlike the gain in loan market share, private banks were unable to gain significant market share in deposits given the strong deposit franchise of the government owned banks.

Within state-run banks, non-PCA ones held on to their market share at 52-53 per cent, however, deposit market share of PCA ones declined to 21.9 per cent as of March 2018 from 25.1 per cent as of June 2016.
| Edited by: Naqshib Nisar
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
Most Active
Company Price Change %Gain
Indiabulls Hsg 788.65 -13.08
Reliance 1,151.30 -1.07
Infosys 705.35 1.45
Dewan Housing 235.90 -12.24
Yes Bank 231.90 -6.83
Company Price Change %Gain
Reliance 1,148.90 -1.27
Indiabulls Hsg 788.85 -13.17
La Opala RG 215.25 0.00
Dewan Housing 236.30 -12.34
Infosys 704.50 1.16
Top Gainers
Company Price Change %Gain
HCL Tech 1,024.25 2.08
Infosys 705.35 1.45
ITC 286.45 1.34
Wipro 323.15 1.29
Coal India 279.90 1.27
Company Price Change %Gain
ITC 286.35 1.34
Wipro 324.00 1.20
Infosys 704.50 1.16
Coal India 279.65 1.14
HUL 1,561.05 1.08
Top Losers
Company Price Change %Gain
Indiabulls Hsg 788.65 -13.08
Bajaj Finance 2,150.50 -6.86
Yes Bank 231.90 -6.83
Adani Ports 313.90 -5.83
BPCL 285.15 -5.61
Company Price Change %Gain
Yes Bank 231.75 -6.85
Adani Ports 314.30 -5.62
Maruti Suzuki 6,878.70 -3.79
Tata Motors 179.20 -3.40
Tata Steel 554.65 -3.39

Live TV

Loading...
Loading...