Net profit jumps 55% to Rs 250 crore, BFSI News, ET BFSI

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New Delhi: Public sector Central Bank of India on Tuesday reported an over 55 per cent jump in net profit at Rs 250 crore for the quarter ended September. The lender had posted a net profit of Rs 161 crore during the same quarter of the previous fiscal.

However, total income of the bank during July-September period of 2021-22 was down at Rs 6,503.39 crore, as against Rs 6,762.36 crore in the year-ago period, it said in a regulatory filing.

Net interest income rose 5.99 per cent to Rs 2,495 crore, as against Rs 2,354 crore earlier.

Net interest margin (NIM) improved from 3.21 per cent to 3.36 per cent on a year-on-year basis, registering an improvement of 15 basis points, it added.

On the asset quality front, net non-performing assets (NPAs or bad loans) reduced to 4.51 per cent as of September 30, 2021, from 5.60 per cent by end of the same month last year.

Gross NPAs moderated to 15.52 per cent from 17.36 per cent.

Also, the bank’s cost of deposit declined to 3.84 per cent from 4.45 per cent for the reported quarter.

However, there was a slight uptick in provisions and contingencies for the quarter at Rs 1,048.52 crore, as against Rs 1,033.34 crore parked aside in the September 2020 quarter.

The state-owned lender said its slippage ratio stood at 1.45 per cent as against 0.08 per cent as there was a moratorium granted by RBI due to the COVID-19 pandemic. In the June 2021 quarter, it was 0.95 per cent.

“Slippage ratio during the quarter increased due to slippage of two corporate accounts of Rs 1,150 crore. Had these accounts not slipped during the quarter then the slippage ratio for Q2FY22 would have been 0.67 per cent,” the bank said in a release.

Total business stood at Rs 5,12,094 crore as on September 30, 2021, compared to Rs 5,00,737 crore earlier, registering a growth of Rs 11,357 crore (2.27 per cent) year-on-year.

Total deposits have increased by Rs 13,056 crore and stood at Rs 3,36,500 crore at the end of the quarter, from Rs 3,23,444 crore in the year-ago period, reflecting an increase of 4.04 per cent, it added.

Central Bank of India scrip closed at Rs 23.60 apiece on BSE, up 4.66 per cent from the previous close.



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Kotak Mahindra Bank Q2 net down 7%

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Private sector lender Kotak Mahindra Bank reported a seven per cent year-on-year (y-o-y) drop in its standalone net profit for the second quarter of the fiscal due to higher provisions. For the quarter-ended September 30, the bank’s standalone net profit stood at ₹2,032.01 as against ₹2,184.48 crore in the same period last fiscal. However, on a sequential basis, its net profit increased by 24 per cent from ₹1,642 crore for the first quarter of the fiscal.

Its net interest income increased three per cent to ₹4,021 crore in the second quarter of the fiscal from ₹3,897 crore a year ago.

Net interest margin for the second quarter of the fiscal stood at 4.45 per cent from 4.5 per cent a year ago.

The bank’s other income increased by 26.5 per cent on an annual basis to ₹1,812.59 crore in the quarter under review.

Provisions jumped up by 27.2 per cent to ₹423.99 crore in the July to September 2021 quarter from ₹333.22 crore in the same period last fiscal.

The bank said it holds Covid-19 provisions of ₹1,279 crore which has not been utilised during the first half of the fiscal year.

Asset quality

As on September 30, 2021, gross non-performing assets stood at 3.19 per cent of gross advances as against 3.56 per cent as on June 30, 2021 and 2.55 per cent as on September 30, 2020. It was lower than ₹703.52 crore in the first quarter of the fiscal.

Net NPA was 1.06 per cent of net advances at the end of the second quarter versus 1.28 per cent at the end of the first quarter and 0.64 per cent as on September 30, 2020.

Jaimin Bhatt, Group President and Group Chief Financial Officer, Kotak Mahindra Bank said that gross slippages amounted to ₹1,293 crore and recoveries and upgrades stood at ₹1,350 crore in the second quarter of the fiscal.

In accordance with the Resolution Framework for Covid-19 related stress of individuals and small businesses, the bank has implemented total restructuring of ₹495 crore (0.21 per cent of advances) as on September 30, 2021.

In addition, in accordance with the Resolution Framework for Covid-19 related stress of MSMEs, the bank has implemented total restructuring of ₹767 crore (0.33 per cent of advances) as at September 30, 2021.

The bank implemented resolution plans in 6,522 accounts with an exposure of ₹226.66 crore under the RBI’s Resolution Framework 1.0. Of this, 27.32 crore slipped into NPA in the first half of the fiscal and the bank wrote-off ₹17.68 crore.

Under Resolution Framework 2.0, the lender has implemented resolution plans in 2,234 accounts with a total exposure of ₹268.63 crore. On account of this, the bank increased provisions by ₹37.73 crore.

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Canara Bank Q2 net jumps 200% to ₹1,333 crore

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Canara Bank reported a 200 per cent year-on-year (y-o-y) jump in second quarter net profit at ₹1,333 crore against ₹444 crore in the year-ago period, supported by healthy growth in other income and lower loan loss provisions.

Net interest income (difference between interest earned and interest expended) was down a shade at ₹6,273 crore (₹6,305 crore in the year ago period).

Non-interest income, comprising fee-based income, trading income, recovery in written-off accounts, and others, was up 37.54 per cent y-o-y at ₹4,268 crore (₹3,103 crore).

Loan loss provisions declined 24 per cent y-o-y at ₹2,678 crore (₹3,533 crore).

Slippages and recovery

Fresh slippages during the quarter increased by ₹6,525 crore (₹4,253 crore in the preceding quarter). This includes ₹3,200 crore exposure to the SREI Group.

The public sector bank made higher cash recovery of ₹3,002 crore (₹1,598 crore in the preceding quarter). Upgradation and write-offs amounted to ₹2,671 crore (₹2,292 crore) and ₹1,585 crore (₹2,574 crore), respectively.

Gross non-performing assets (NPAs) position improved 8 basis points to 8.42 per cent of gross advances against 8.50 per cent as on June-end 2021.

Net NPA position improved 25 basis points to 3.21 per cent of net advances against 3.46 per cent as on June-end 2021.

LV Prabhakar, MD & CEO, observed that going forward, the bank’s balancesheet will strengthen further, with gross non-performing assets (excluding transfer of stressed assets to the National Asset Reconstruction Company) expected to decline to at least 7.5 per cent by March-end 2022 and credit growth (global) projected at 7.5 per cent for FY22, seen picking up steam from third quarter onwards.

The bank recovered about ₹1,700 crore from DHFL’s corporate insolvency resolution process (CIRP) and made 50 per cent provision towards its exposure to the SREI Group, which has become a non-performing account, Prabhakar said.

Net interest margin declined to 2.72 per cent from 2.82 per cent as on September-end 2020.

Global (domestic plus overseas) gross advances grew about 6 per cent y-o-y to ₹6,86,813 crore.

Within domestic advances (which were up 5.71 per cent yoy), Agriculture & Allied advances grew by 13.92 per cent; retail (10.46 per cent); MSME (0.31 per cent); and corporate and others (2.23 per cent). Overseas advances increased by 9.36 per cent yoy.

Global Deposits rose about 9 per cent to ₹10,32,536 crore. Domestic deposits and overseas deposits increased by 7.61 per cent and 38.15 per cent, respectively.

The proportion of low-cost CASA deposits improved to 34.11 per cent in total domestic deposits as at September-end 2021 against 32.77 per cent as at September-end 2020.

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Lender posts highest ever quarterly profit at Rs 3,133 cr, up 86% YoY, BFSI News, ET BFSI

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Axis Bank on Tuesday reported an 86 per cent year-on-year (YoY) rise in net profit at Rs 3,133 crore for the September quarter compared with Rs 1,683 crore in the same quarter last year. This was the highest ever quarterly profit for the bank, the lender said in a BSE filing.

Net interest income (NII) for the bank rose 8 per cent YoY to Rs 7,900 crore compared with Rs 7,326 crore in the year-ago quarter. Net interest margin (NIM) for the recently concluded quarter came in at 3.39 per cent.

Specific loan loss provisions for the September quarter stood at Rs 927 crore compared with Rs 2,865 crore in the June quarter and Rs 724 crore in the year-ago quarter. Total Provisions & contingencies for the quarter fell to Rs 1,735 crore from Rs 3,302 crore in the preceding quarter and Rs 4,343 crore in the corresponding quarter last fiscal.

More to come…

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Foreign brokerages not so bullish, market correction in the offing?, BFSI News, ET BFSI

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NEW DELHI: Foreign brokerages are downgrading Indian markets for being extremely expensive based on traditional valuation metrics, when compared to peers such as China and Japan in Asia.

The NSE Nifty is up 30 per cent in 2021 so far, while the BSE sensex is up 28 per cent, driven by financials, utilities, industrials and consumer discretionary stocks even as the broader MSCI Asia Pacific ex-Japan index has largely remained flat.

On Monday, Nomura downgraded India’s equity markets to neutral from overweight due to expensive equity valuations.

The Japanese brokerage firm prefers allocating to China and other Asean countries that have underperformed India in 2021. The brokerage feels while the upside is already priced in, headwinds could emerge that will prove to be risky in the future.

Nomura said 77 per cent of domestic stocks in the MSCI index are trading higher than pre-pandemic or post 2018 average valuations.

“We now see an unfavourable risk-reward given valuations, as a number of positives appear to be priced in, whilst headwinds are emerging. We, thus, downgrade India to neutral in our regional allocation and will look for better entry points given our still-constructive medium term view. We like China (significant under-performer seeing stabilising sentiment) and Asean (tactically laggard reopening play),” said equity strategists Chetan Seth and Amit Phillips in a note.

Ironically, in February Nomura had upgraded India to overweight, citing fiscal activism and declining Covid-19 cases.

“However, we think these positives are now adequately reflected in current valuations – that appear rich not only on absolute basis but also on relative basis. Even on two-year forward price-to earnings (PE) basis (incorporating India’s strong earnings outlook), India is trading at record high elevated premium relative to regional markets,” the analysts added.

What are the biggest risks for India?Elevated commodity prices, sticky core inflation and tentative signs of slowdown in demand are among the biggest risks for India.

Analysts at Nomura think if the current trend in prices of natural gas, crude, coal and electricity continue till the end of the calendar year, and increase by around 5 per cent till March 2022, then the potential impact on consumer price inflation (CPI) would be around 1 per cent.

Nomura not the only one

Nomura is not the only one advising clients to cut allocations to India. Last week, brokerage UBS echoed similar views and said India has become “unattractive” due to “extremely expensive” valuations when compared to the Asean countries.

The brokerage also said that earnings momentum is fading in India and there is less scope for an economic rebound this year, even as domestic stocks have outperformed markets like Indonesia by 31 per cent year-to-date.

Low real yield and expensive currency suggest some vulnerability for India in the tapering environment.

“India, like Taiwan, looks very poor on our scorecard framework. The relative valuation of India to Asean, two areas with similar growth dynamics and occasional perceived macro vulnerabilities, looks too wide to justify,” it said.

A Bank of America survey that was released last week showed global fund houses are underweight on emerging markets and want to cut exposure in the next 12 months, citing inflationary risks.

Global fund managers’ allocation in October to emerging market equities fell to the lowest level since September 2018, while allocation to US equities increased to the largest since November 2020.

In a newsletter titled Greed & Fear, Christopher Wood, the global head of equity strategy at Jefferies, has said India’s overweight position looks ‘vulnerable’.

What is triggering the market correction?

Rising fuel prices, inflation and high valuations are now triggering a correction in the market after months of record rallying.

While the sensex is down 1 per cent in the last five days, slipping below the 61,000-mark, the Nifty also slipped below 18,000 as experts are starting to caution investors because of stretched valuations and the impact of inflation on corporate earnings.

The BSE sensex last touched an all time high of 62,245 on October 19, but since then it has declined by 2 per cent.

More such calls for reduction of allocation to India is likely to result in further outflow of funds and a deeper correction in the markets.

Foreign portfolio investors (FPIs) have already turned net sellers by pulling out Rs 3,825 crore in October so far. FPIs had been net buyers for two consecutive months and had invested Rs 26,517 crore in September and Rs 16,459 crore in August.



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BharatPe opposes PhonePe’s trademark over ‘PE’ usage in Devanagari

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Resilient Innovations or BharatPe, which recently launched a ‘buy now pay later’ app under the trademark “postpe”, has filed six cancellation actions against the multiple registrations held by PhonePe for the ‘PE’ device mark in Devanagari script, at the intellectual property division of the Delhi High Court.

“By taking on a trademark for the ‘PE’ device mark in Devanagari script in classes relating to payment services in a country like India, where Hindi is the primary language of the masses, PhonePe has acted against the larger public interest, and Resilient is committed to undoing this,” Resilient Innovations said on Tuesday.

A company statement further said that PhonePe has been asserting its registration for the ‘PE’ device mark in Devanagari script as equivalent to the English word “pay”.

Strong growth in digital payments indicates a lasting shift in consumer payment behaviour

“This was the same position taken by PhonePe in a recent case filed by it before the Bombay High Court against Resilient’s use of the mark ‘postpe’, which stands withdrawn at present,” it further said.

Coming soon, new framework for offline digital payments

Earlier this year, the Delhi High Court had rejected PhonePe’s assertion of exclusivity over the usage ‘PE’ at the interim stage. Even the Bombay High Court rejected PhonePe’s assertion at the interim stage.

“Both courts noted that the word ‘PE’ was prima facie incapable of protection as a trademark standalone,” the company said.

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Is Investing in Cryptocurrency Better Than Investing in Gold?

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Investment

Bitcoin reached a record high of $65,000 (INR 48 lacs) earlier this year but only to retract back to $30,000 this May fuelled by China’s mining crackdown. However, Bitcoin has been making steady progress towards it’s all time highs again as it continues to attract investors all over the world. While worries about speculation and volatility in cryptocurrencies exist, investors who have firmly remained long-term with assets such as Bitcoin and Ethereum have better yields than other assets in their portfolios.

Asset Value of portfolio today if INR 1000 was invested
1 year back 3 years back 5 years back
Bitcoin 4159 6640 83549
Ethereum 8094 12441 303270
Gold 920 1520 1382
Silver 849 1699 1267

All numbers in INR. Data as of 1st Sep 2021.

Source: Giottus, coinmarketcap.com and goldprice.org

Against this backdrop, multiple altcoins (alternative cryptocurrencies) have also flourished, each with its own set of real-world use cases. However, they are yet to reach scale globally and hence remain primarily volatile.

Rising global adoption by institutional investors and companies such as Visa, PayPal, and Tesla means that the ecosystem will grow. Today, compared to a market capitalization of $10B for Gold, the crypto market is $2B. In five years, we expect the gap to close significantly.

Given the potential to grow, Bitcoin as an investment is a definite winner. Through a registered exchange, Indian investors can acquire Bitcoin or any other cryptocurrency and for as low as INR10 post a quick KYC process.

Security

Security

Gold (physical) has to be stored at home or in bank lockers. They can be a burden on occasions when transporting between cities etc. No insurance product caters to the storage of Gold, and hence it is always a risk to households.

Cryptocurrencies are stored in digital wallets that often have two-factor authentication. They can also be secured in physical wallets, which need similar safekeeping as physical Gold. Some global companies insure part of your crypto portfolio. There are crypto firms that allow users to store assets with insurance on their cold wallets.

Overall, there is no clear winner in terms of security between the assets. Investors can prefer one approach over the other depending on their service.

Liquidity and Borrowing capacity

Liquidity and Borrowing capacity

Cryptocurrencies are easily interchangeable between one another and with Indian Rupee. Unlike physical Gold, international exchanges allow customers to buy digital assets. A global market that is 24×7 and not restricted to the bank timings in India opens up many opportunities for investors and traders.

Via a registered Indian exchange, investors can quickly deposit INR to buy cryptocurrencies and withdraw to INR when required. Overall, Cryptocurrencies are more liquid than Gold, given the ease of selling them with a click of the button.

Banks and other unregistered lenders are often willing to give cash in quick time in exchange for Gold. Some products even let you earn interest on digital assets.

Grow your crypto portfolio steadily and be patient

Grow your crypto portfolio steadily and be patient

If you believe in the growth markers above and if the past is any indication, cryptocurrencies are a class of assets worth investing in for the long term. Given the familiarity, Gold continues to be a key driver of investments along with bank deposits.

On the other hand, cryptocurrencies represent the highest growth class with significant liquidity that suits Indian households. While you can’t display them like jewelry, you can always gain wealth and invest some in Gold again if that’s your thing.

A disclaimer, though, we suggest not to have more than 5% of your portfolio on cryptocurrencies at the start. This allocation can vary depending on your risk appetite.

About the author:

Vikram Subburaj is the Co-Founder and CEO of Giottus Cryptocurrency Exchange



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5 Listed Holding Company Stocks In India With M-Cap Over Rs. 10000 Cr.

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1. Bajaj Finserv:

The stock is among the priciest stocks last quoting at a price of Rs. 18,255, while its 52-week high price is Rs. 19325. The company commands a market cap of Rs. 2,90,846 crore.

Bajaj Finserv established in the year 2007 was the result of its demerger from the Bajaj auto group and was to further foray and expand in the area of financial services. The demerger enabled the company to independently handle lending, protection and savings. This is the holding company for the businesses dealing with the financial services domain of the Bajaj Group

The firm’s second quarter earnings are expected on October 28, 2021. In the previous quarter, the company’s total income from operations came in at Rs. 22.89 crore and net profit stood at Rs.0.37 crore.

For the fy21, the firm declared a total dividend of Rs. 8 per share.

2. Bajaj Holdings and Investments:

2. Bajaj Holdings and Investments:

This is an NBFC company and was demerged whereby its manufacturing undertaking has been transferred to the new Bajaj Auto Limited (BAL) and its strategic business undertaking consisting of wind farm business and financial services business has been vested with Bajaj Finserv Limited (BFS). All the businesses and all properties, assets, investments and liabilities of erstwhile Bajaj auto Ltd, other than the manufacturing undertaking and the strategic business undertaking, now remain with BHIL

Post-demerger, BHIL holds more than 30% shares each in BAL and BFS. Going forward, BHIL will focus on new business opportunities. BAL and BFS will be able to tap (on an arm’s length basis) into BHIL’s cash pool to support future growth opportunities. BHIL by having 30% stake in both BAL and BFS will benefit from the future growth of these companies.

The scrip last traded at a price of Rs. 4744 per share on the NSE and commands a market cap of Rs. 52,729 crore. The firm’s latest earnings are due to be reported on October 28,2021.

The firm as an interim dividend declared a dividend of a hefty Rs. 90 per share for which the stock turned ex-dividend on September 28, 2021. This dividend declaration provided a huge lift to the stock.

3. Aditya Birla Capital:

3. Aditya Birla Capital:

This is again a financial sector holding enterprise. The stock’s m-cap stands at Rs. 24,281 crore. The company is again the holding company for the financial services businesses of the Aditya Birla Group.ABCL is a universal financial solutions group catering to diverse needs of its customers across their life stages. As of June 30th, 2021, Aditya Birla Capital Limited manages aggregate assets under management over Rs. 3,430 billion, has a consolidated lending book of approx. Rs. 572 billion, and an active customer base of over 25 million, through its subsidiaries and joint ventures.

Aditya Birla Capital Limited is a part of the Aditya Birla Group, in the league of Fortune 500.

The company’s stock last traded at a price of Rs. 100 per share. In the previous quarter, the company’s profit was at Rs. 26.49 crore lower than the preceding quarter wherein the profit came in at Rs. 62.4 crore.

4. L&T Finance Holdings:

4. L&T Finance Holdings:

L&T Finance Holdings (LTFH) is a leading, well-diversified Non-Banking Financial Company (NBFC) with a focused range of financial products and services across rural, housing and infrastructure finance along with mutual funds. The company is promoted by Larsen & Toubro Ltd. (L&T), one of the largest conglomerates in India, with interests in engineering, construction, electrical & electronics manufacturing & services, IT and L&T Financial Services (LTFS) is the brand name of LTFH and provides financial solutions to a diverse set of customer base through its lending and non-lending businesses.

L&T Financial Services (LTFS) is the brand name of LTFH and provides financial solutions to a diverse set of customer base through its lending and non-lending businesses. The lending business comprises of Rural Finance (Farm Equipment Finance, Two-Wheeler Finance, Micro Loans and Consumer Loans), Housing Finance (Home Loans, Loan against Property and Real Estate) and Infrastructure Finance.

The company’s scrip last traded at a price of Rs. 84.80 and its market cap is at Rs. 20,929 crore.

5.	Cholamandalam Financial:

5. Cholamandalam Financial:

Part of the Murugappa group, this is the core investment company. The company’s stock last traded at a price of Rs. 691.5 while its market cap has been at Rs. 12981 crore.

Cholamandalam Financial Holdings Limited (CFHL) (formerly known as TI Financial Holdings Limited) was incorporated in 1949. Consequent to the scheme of arrangement (demerger) sanctioned by the National Company Law Tribunal, the manufacturing business of the Company was transferred to a separate company and the company retained its finance business.

Other holding companies listed in India

Other holding companies listed in India

Besides the list of other holding companies include names like Kama Holdings, JSW Holdings, Pilani Investment, Tata Investment, Kirloskar Industries, BF Investment, STEL Holdings, Equitas Holdings, Max Ventures, JM Financial, GFL, Max India, Tamboli Capital, Innovassynth Investments Ltd. and Toyam Industries.



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Residential vs Commercial: Where To Invest For Rental Income?

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Investment

oi-Sunil Fernandes

By Siddharth Maurya

|

Amongst the investment options available such as a fixed deposit, gold, mutual funds and PPF, people still consider real estate or property investment as one of the safest ones. Being one of the few tangible investment options around, real estate is still the most trusted one.

Residential vs Commercial: Where To Invest For Rental Income?

The opportunity cost of realty investment in comparison to other instruments is favourable. Real estate as a tangible asset class is less volatile when compared to equities. Despite a heavy toll due to a multitude of factors, the real estate segment, especially the residential realty segment, has withstood the pressure of time and is an ideal investment class for medium and low-risk appetite investors.

However, when they say, the land is the best investment option on the earth; they fail to specify the type. Residential or commercial? This is the million-dollar question a property investor, aiming to earn a rental income, asks before putting his hard-earned money in real estate. Honestly speaking, both residential and commercial property investments come with their own set of pros and cons. Let us analyse in greater detail.

Residential investment for rental income

The investors are primarily driven towards investing in residential properties and earning a rental income out of them. There are a multitude of factors behind this trend such as easier acquisition or construction of a residential property, lesser approvals, faster clearances, comparatively lower initial investment and easier resale. Moreover, residential properties are likely to get tenants faster than their commercial counterparts.

However, if we look at the historical ROI, rental returns from the residential property are way lower as compared to commercial properties. Rental returns from residential properties can be pegged at 2 percent per annum on an average.

Let us try to understand by an example, a luxury 3 BHK flat of Rs 2.5 crore in an upscale locality of Gurgaon is likely to fetch rentals at Rs 40,000 to 42,000 per month or Rs 4,80,000 to 5,04,000 lakh annually. In addition to this, the rate of appreciation is hugely dependent on a range of factors such as location, presence of physical and social amenities, city and connectivity quotient of the region.

A key advantage for residential property is that the maintenance cost is far lesser in comparison to large commercial properties. It is an important factor as these charges can eat up a significant part of the rental income earned from property investment. If the budget is low, it is better to go for a residential property.

Commercial realty investment

The commercial properties generally include shops, offices, warehouses, Godowns and showrooms among others.

In comparison to the residential property investment, the commercial properties have a high rental yield. The rental returns from commercial property investment can be pegged at over 8 percent per annum.

Although commercial property investment attracts a large initial sum as compared to residential properties, the attractive rental returns compensate for the initial investment blues. If the rental returns are understood from an example, a 429 sq ft shop in Gurgaon, priced at Rs 35,000 per sq ft will fetch a rent of Rs 1, 07, 250 per month or over Rs 12 lakh per annum.

In addition to this, the rate of appreciation of commercial real estate is faster in comparison to residential properties. However, a dampening factor can be a high maintenance cost. It can range up to Rs 7-12 per sq ft per month, depending upon the type of property. Moreover, the lease or rent agreements of commercial properties are generally long term, leaving little room for frequent change of tenants and rent negotiations. They prove to be a consistent source of rental income than residential investment.

Conclusively, if the budget is low, maintenance capacity is poor and frequent change of tenants is not an issue, an investment into the residential realty segment is suggested. However, if budget is not a constraint, the commercial real estate investment will yield far better and faster returns than a residential flat or villa. The investors must use discretion and consider all the factors such as budget, amenities and connectivity, security and presence of markets before investing their hard-earned money into a property business for rental income.

Authored by Siddharth Maurya, Resource Specialist – Real Estate and Fund Management

Story first published: Tuesday, October 26, 2021, 15:09 [IST]



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Canara Bank Q2FY22 net profit triples

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Canara Bank reported a 200 per cent year-on-year (yoy) jump in second quarter net profit at ₹1,333 crore against ₹444 crore in the year ago period, supported by healthy growth in other income and lower loan loss provisions.

Net interest income (difference between interest earned and interest expended) was down a shade at ₹6,274 crore (₹6,305 crore in the year ago period).

Non-interest income, comprising fee based income, trading income, recoery in written-off accounts, and others, was up 37.54 per cent yoy at ₹4,268 crore (₹3,103 crore).

Loan loss provisions declined 24 per cent yoy at ₹2,678 crore (₹3,533 crore).

Fresh slippages during the quarter increased by ₹6,525 crore (₹4,253 crore in the preceding quarter).

The public sector bank made higher cash recovery of ₹3,002 crore (₹1,598 crore in the preceding quarter). Upgradation and write-offs amounted to ₹2,671 crore (₹2,292 crore) and ₹1,585 crore (₹2,574 crore), respectively.

Gross non-performing assets (NPAs) position improved 8 basis points to 8.42 per cent of gross advances against 8.50 per cent as at June-end 2021. 

Net NPA position improved 25 basis points to 3.21 per cent of net advances against 3.46 per cent as at June-end 2021. 

Net interest margin declined to 2.72 per cent from 2.82 per cent as at September-end 2020.

Global (domestic plus overseas) gross advances grew about 6 per cent yoy to ₹6,86,813 crore. 

Within domestic advances (which were up 5.71 per cent yoy), Agriculture & Allied advances grew by 13.92 per cent; retail (10.46 per cent); MSME (0.31 per cent); and corporate and others (2.23 per cent). Overseas advances increased by 9.36 per cent yoy.

Global Deposits nudged up about 9 per cent to ₹10,32,536 crore. Domestic deposits and overseas deposits increased by 7.61 per cent and 38.15 per cent, respectively.

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