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Credit rating CARE has said that in fourth quarter of 2015-16, the country’s banking sector was a drag in the country’s overall corporate performance. In a review, CARE said that 11 Indian banks reported slowdown in sales and sharp losses.
“In fact, this sector has been responsible for the overall lower performance of the corporate sector based on the results so far,” the rating agency said.
The gross NPAs of these 11 banks increased from 2.18 per cent in Q4-FY15 to 2.89 per cent in Q4-FY16. The rise in NPA also increased provisioning affecting the bottomline.
CARE’s analysis of fourth quarter results from a sample of 216 showed a significant rise in sales and net profit. According to CARE, these companies witnessed growth in sales of 4.1 per cent in Q4-FY16 as against -7.1 per cent last year while net profit grew by 13.5 per cent as against 7.1 per cent.
“The results, however, have been impacted by the performance of 2 companies which are the outliers: Reliance Industries and Vedanta," the rating agency stated.
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