Motilal Oswal: RBI Projects Gross Non-Performing Assets To Increase To 12.5% For FY21

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.The Reserve Bank of India released a financial stability report highlighting that economic prospects appear severely impacted by lockdown-induced disruptions to both supply- and demand-side factors, diminished consumer confidence, and risk aversion, etc. However, some signs of gradual recovery are becoming increasingly visible.The RBI conducted a macro stress test analyzing the implications of slowdown in economic activity on the asset quality and capital ratios of banks. It indicated that the gross non performing assets (GNPA) ratio could escalate to 12.5% for FY21 under the baseline scenario. On the other hand, if the situation worsens, the GNPA ratio could escalate to 14.7% under the very severe stress scenario.Contrary to this, Common Equity Tier (CET-I) could decline to 10.7% under the base case and 9.4% under the very severe stress scenario (versus current CET-I of 11.7%).Nearly half the system loans had availed moratorium (as of April 30, 2020): 42% in Corporate, 65% in small and medium enterprise, and 55% in Retail loans. Overall, 68% of the public sector banks portfolio availed moratorium, 31% of Private Banks, and approximately 49% of Non banking financial company (NBFC)s..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Motilal Oswal: RBI Projects Gross Non-Performing Assets To Increase To 12.5% For FY21

Motilal Oswal: RBI Projects Gross Non-Performing Assets To Increase To 12.5% For FY21

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