Kerala Gramin Bank education bad loans shoot to 33 pc
THIRUVANANTHAPURAM: Banks are either slowly being crowded out of the housing loan business in Kerala or maybe the number of takers for housing loans is fast declining in the state.
On a different note, Kerala Gramin Bank has burnt its fingers on its Rs705.81 crore education loans basket as more than one-third of it or Rs235.38 crore worth loans have turned bad. Private sector banks that carry Rs1311 crore education loans also are reeling from close to 20 per cent of bad loans within that portfolio.
The total size of education loans portfolio in Kerala as of June end, 2019, is Rs10,083 crore with 80 per cent of it being controlled by public sector (PSU) banks.
The trend in housing loans disbursement by banks in Kerala during the recent past points to a poignant fact that their aggregate housing loan volume that has been growing, though slowly, until last year, has now taken a ‘U’ turn and started contracting, raising vexing questions.
This fact that the volume of housing loan closures by banks is fast surpassing the new loan disbursement volumes is causing concerns. The loan statistics available on the banks within the state show that between June 2018 and June 2019, the housing loans portfolio has contracted by Rs4828 crore – from Rs33,253 crore to Rs28,425 crore.
More importantly, the size of housing loans portfolio as of June end, 2019 has been even smaller than what was two years ago, by Rs1162 crore. However, the non-performing assets (NPA) or the bad loans in housing sector are only 2.67 per cent, according to the latest computation of bank statistics.
While the housing finance companies (HFCs) such as HDFC have a strong presence in the state, the leading Kerala headquartered NBFCs such as Muthoot Finance and Manappuram Finance with strong fund base are also focusing more on housing loan segment in order to grow their assets under management (AUM) fast.
While Manappuram Finance has grown its housing loans portfolio to Rs567.93 crore as of June 2019, Muthoot Finance with a much stronger financial muscle and reach has expanded its portfolio to as large as Rs1987.50 crore by June, 2019.
