LIC Records Over 200% NPA Rise in Last 5 Years, Total Gross Surges to Rs 30,000 Crore; Situation Comparable to ICICI Bank
LIC, with a total assets value of Rs 36 lakh crore, recorded an average annual profit of around Rs 2,600 crore. Despite a spree of insurance companies propping up in the last two decades, the bulk of Indians have reposed their faith in the state-controlled insurance corporation. As per the latest market stats, LIC dominates the sector with over 65 percent market share.
New Delhi, January 22: The state-owned Life Insurance Corporation (LIC), which continues to remain the most trusted insurance company in India, has recorded a whopping 200 percent rise in non-performing assets (NPAs) in the last five years. The total gross NPA has surged to Rs 30,000 crore, nearly double of what it was in the last five years. LIC Allows Policyholders to Revive Lapsed Policies of Over 2 Years.
The situation is comparable to the crisis being faced by private sector lenders - ICICI Bank, Yes Bank and Axis Bank - where the NPAs have significantly damaged the fiscal health. The three banks recorded NPAs of 6.37, 7.39 and 5.03 percents in the second quarter of 2019-20. Comparing the same with the LIC, it was found that the insurance sector giant recorded a similar 6.10 rise in NPAs between April-September.
The gross NPA recorded till September 2019 is double of what it was in the same period in 2014. The LIC, over the past couple of decades, has maintained an NPA ratio of 1.5-2 percent. The rise to 6.10 percent raises concern among the crores of Indian investors who are depositing their hard-earned money in bid to secure their futures.
The prime contributors of the NPA-surge for LIC are the same firms which have weakened the financial health of ICICI Bank, Yes Bank and Axis Bank, a BusinessToday report has revealed. Among the big defaulters, include Deccan Chronicle, Essar Port, Gammon, IL&FS, Bhushan Power, Videocon Industries, Alok Industries, Amtrak Auto, ABG Shipyard, Unitech, GVK Power and GTL.
LIC, with a total assets value of Rs 36 lakh crore, recorded an average annual profit of around Rs 2,600 crore. Despite a spree of insurance companies propping up in the last two decades, the bulk of Indians have reposed their faith in the state-controlled insurance corporation. As per the latest market stats, LIC dominates the sector with over 65 percent market share.
(The above story first appeared on LatestLY on Jan 22, 2020 02:52 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).