{"id":23544,"date":"2022-02-14T16:20:49","date_gmt":"2022-02-14T10:50:49","guid":{"rendered":"https:\/\/tradebrains.in\/features\/biz-study-non-banks\/"},"modified":"2022-02-14T16:30:17","modified_gmt":"2022-02-14T11:00:17","slug":"biz-study-non-banks","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-study-non-banks\/","title":{"rendered":"Asset quality issues to affect performance of real estate-focused non-banks till FY2023: Study"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2191408130\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p> Mumbai, Feb 14 (PTI) The real estate asset under management (AUM) of non-banks, which registered degrowth of 10 per cent in 2021, is likely to further contract by 5-10 per cent in 2022 and stabilise in the next year, says a report.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-3550814929\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div>\n<p> The performance of non-banks (non-banking financial companies and housing finance companies) in recent years has been marred by several challenges as entities have grappled with fund-raising challenges and asset quality issues, domestic rating agency Icra Ratings said in a report on Monday.<\/p>\n<p> The outlook for real estate-oriented non-banks remains negative due to the asset quality pressures over the near to medium term and the muted growth expectation, the agency said.<\/p>\n<p> The real estate AUM of non-banks contracted by 17.64 per cent to Rs 2.8 lakh crore as of March 2021 from Rs 3.4 lakh crore as of March 2019.<\/p><div class=\"trade-content_5\" id=\"trade-3842183912\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p> &#8220;Icra expects the same to contract further by 5-10 per cent in the current fiscal. It is expected to stabilise in FY2023 (0-5 per cent degrowth),&#8221; the agency said.<\/p>\n<p> Its Vice President and Sector Head (Financial Sector Ratings) Samriddhi Chowdhary said non-banks witnessed a significant slowdown in growth since H2 FY2019, following the liquidity crisis, and consequently moderated their disbursements.<\/p>\n<p> The impact was more pronounced on wholesale financiers with sizeable real estate exposures compared to their retail counterparts owing to a prolonged period of risk aversion by investors and other stakeholders, she said.<\/p>\n<p> &#8220;Given the fund-raising challenges, real estate oriented non-banks not only limited incremental disbursements to this sector but also attempted to scale down their portfolios through asset sell-down to shore up liquidity,&#8221; Chowdhary said.<\/p>\n<p> The agency said non-banks have also witnessed stress build-up in the real estate portfolio since FY2019, given the slowdown in the underlying segment.<\/p>\n<p> Real estate gross non-performing assets (GNPAs) for non-banks increased to 5.1 per cent as of March 2020 from 2.1 per cent as of March 2019 and have remained on an uptick since then.<\/p><div class=\"trade-content-10\" id=\"trade-3739536906\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p> They increased further to 6.2 per cent as of March 2021 and 6.8 per cent as of September 2021.<\/p>\n<p> The rating agency expects an increase of 180-250 basis points (bps) in GNPAs in the real estate segment in FY2022, Chowdhary said.<\/p>\n<p> However, players with a diversified credit book across asset classes are likely to witness a relatively lower increase in NPAs, she said.<\/p>\n<p> The agency said the real estate oriented non-banks have witnessed an improvement in their capitalisation profiles since March 2018 driven by the moderation in the AUM growth coupled with sizable capital raise in a bid to strengthen their balance sheets.<\/p>\n<p> The capital cushion for real estate oriented non-banks is estimated to have increased by 4 per cent from March 2019 to March 2021.<\/p>\n<p> The current capitalisation level also provides the ability to absorb losses.<\/p>\n<p> The agency expects the earnings profile to contract marginally in the current fiscal and stabilise in FY2023 unless there are further pandemic-induced business restrictions. The ability of non-banks to keep the credit costs under control would remain critical, it said. PTI HV  MR<\/p>\n<div class=\"trade-after-content\" id=\"trade-1047926950\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Mumbai, Feb 14 (PTI) The real estate asset under management (AUM) of non-banks, which registered degrowth of 10 per cent in 2021, is likely to further contract by 5-10 per cent in 2022 and stabilise in the next year, says a report. The performance of non-banks (non-banking financial companies and housing finance companies) in recent [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1697,31],"tags":[],"class_list":["post-23544","post","type-post","status-publish","format-standard","hentry","category-economy","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Asset quality issues to affect performance of real estate-focused non-banks till FY2023: Study - Trade Brains Features<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/biz-study-non-banks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Asset quality issues to affect performance of real estate-focused non-banks till FY2023: Study\" \/>\n<meta property=\"og:description\" content=\"Mumbai, Feb 14 (PTI) The real estate asset under management (AUM) of non-banks, which registered degrowth of 10 per cent in 2021, is likely to further contract by 5-10 per cent in 2022 and stabilise in the next year, says a report. 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