One of the ways to measure a bank’s financial health is to see its gross non performing assets (GNPA) ratios. A high GNPA ratio is a red alert for the bank’s asset quality. With the earnings season going on, some banks are seeing a steep decline in gross NPAs as the banking sector shows robust growth as things return to normal. 

Except for Kotak Mahindra Bank private banks have reported a steep fall in gross NPAs. Yes Bank reported a sharp decline in provisions and an improvement in asset quality. For public sector banks, IDBI Bank is leading the charts with a 2,487 basis points (bps)YoY decrease in gross NPAs. Due to a sharp increase in net interest income by 34% to Rs 1,450 crore, Bank of Maharashtra’s net profits rose by 103% to 264 crore.

Most private sector banks have seen a double digit increase in net profits besides Kotak Mahindra Bank which reported a 7% fall in net profits in Q2FY22. The reason the private bank's profits fell is the increase in gross NPA by 64 bps YoY. But the bank is hopeful to bounce back from the red in the coming quarters.