Ahead of its proposed initial public offering (IPO), insurance behemoth LIC has improved its asset quality for the financial year ended March 2021.
The non-performing assets (NPAs) as of March 31, 2021, are `35,129.89 crore out of a total portfolio of `4,51,303.30 crore, according to the latest Annual Report of Life Insurance Corporation of India (LIC).
The sub-standard assets are `254.37 crore whereas the doubtful assets are `20,369.17 crore and loss assets are `14,506.35 crore.
An amount of `34,934.97 crore is provided as per IRDAI guidelines in the books of accounts towards non-performing assets, it said.
The percentage of gross NPA is 7.78 per cent while the net NPA is 0.05 per cent at the end of March 2021. This is lower than gross NPA of 8.17 per cent (as a percentage of its debt portfolio) and net NPA of 0.79 per cent in the previous year.In absolute terms, the NPA was `36,694.20 crore out of a total debt of `4,49,364.87 crore in 2019-20. Stress threshold for banks is different from that for insurers.
LIC usually makes full provisions for all NPA in the debt book. The corporation has made provisions to the tune of `37,341.6 crore, of which `34,934.97 crore is towards doubtful, sub-standard, and loss assets.
