banking stocks: Banks’ NPA provisioning falls as recoveries improve, stress wanes

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The drop in provisioning was largely on account of the private sector banks which reported a 59.7% drop in the aggregate loan loss provisioning for the June quarter.

Synopsis

“Loan loss provisions continued to recede due to better recoveries and healthy provision buffers, thereby leading to overall beat on profitability,” mentioned Emkay Global Financial Services in a sector report. The brokerage expects overall NPA ratios to trend down further led by receding stress pool and better credit growth trajectory.

ET Intelligence Group: Listed banks continued to report lower provisioning for nonperforming assets (NPAs) in the June quarter for the second consecutive quarter amid receding stress on assets and sufficient provisioning in the previous quarters. For a sample of 29 banks, loan loss provisioning fell by 23.7% year-on-year to Rs 29,185.1 crore in the June quarter with two out of every three banks reporting lower NPA. Bad loan provisioning had

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