Non Performing Loans (NPLs) of housing sector swelled to Rs 16 billion
at the end of the first quarter of this fiscal year (FY15). After
witnessing a declining trend in the quarter ending June 2014, NPLs of
housing finance are again on the rise and posted a 1.75 percent increase
during July-September 2014 alone.
"A slight growth in NPLs of house finance was primarily due to high interest rate followed by tight monetary policy adopted by the State Bank of Pakistan (SBP). Secondly, banks and financial institutions make concrete efforts in the closing quarter, ie, June and December for recovery of NPLs," analysts said. The SBP in the last two monetary policies cut the interest rate up to 1.5 percent to fix it at 8.5 percent. The ease in monetary stance and lower interest rate may provide some opportunities to banks and DFIs to recover and control their rising NPLs of housing sector, they added.
According to State Bank, NPLs of housing finance surged to Rs. 15.93 billion as on September 30, 2014 compared to Rs 15.66 billion in June 2014, depicting an increase of Rs 27 million. Overall, housing finance portfolio currently stands at Rs 52.9 billion and HBFCL remained the largest shareholder with 24 percent share in terms of gross outstanding.
The HBFCL''s NPLs showed a marginal increase of Rs 18 million reaching Rs 6.4 billion in September 2014 over the previous quarter ended June, 2014. Furthermore, its percentage share in its total outstanding is greatest after foreign banks'' NPLs. During the quarter under review, the HBFCL''s 51 percent of the total outstanding constitutes NPLs, while its share in total NPLs is 40 percent.
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"A slight growth in NPLs of house finance was primarily due to high interest rate followed by tight monetary policy adopted by the State Bank of Pakistan (SBP). Secondly, banks and financial institutions make concrete efforts in the closing quarter, ie, June and December for recovery of NPLs," analysts said. The SBP in the last two monetary policies cut the interest rate up to 1.5 percent to fix it at 8.5 percent. The ease in monetary stance and lower interest rate may provide some opportunities to banks and DFIs to recover and control their rising NPLs of housing sector, they added.
According to State Bank, NPLs of housing finance surged to Rs. 15.93 billion as on September 30, 2014 compared to Rs 15.66 billion in June 2014, depicting an increase of Rs 27 million. Overall, housing finance portfolio currently stands at Rs 52.9 billion and HBFCL remained the largest shareholder with 24 percent share in terms of gross outstanding.
The HBFCL''s NPLs showed a marginal increase of Rs 18 million reaching Rs 6.4 billion in September 2014 over the previous quarter ended June, 2014. Furthermore, its percentage share in its total outstanding is greatest after foreign banks'' NPLs. During the quarter under review, the HBFCL''s 51 percent of the total outstanding constitutes NPLs, while its share in total NPLs is 40 percent.
Read more at Click here / www.trade4x.net
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