Category: Banking & Finance

Elevation Capital VI FII Holdings (formerly known as SAIF India VI FII Holdings) has upped its stake in Muthoot Capital Services from 7.02 per cent to 9.52 per cent.

In a regulatory disclosure, Elevation Capital said it acquired the shares of Muthoot Capital Services via open market purchase on Monday.

Muthoot Capital Services, promoted by the Muthoot Pappachan Group, is a Non-Banking Finance Company (NBFC). It offers retail finance products such as two-wheeler loans and used car loans and an investment product in the form of fixed deposits.

As of December-end 2020, the assets under management of Muthoot Capital Services stood at ₹2,199.6 crore (₹2,235.4 crore as of September-end 2020).

“Used car loan business is spreading to other locations, albeit slowly; e-rickshaws disbursement has started, consumer durable will start in FY21; co-lending as a form of sourcing is also expected to start in Q4 FY21 in areas where our own presence is low,” the company said in a recent presentation.

Our Bureau

Fullerton India Credit Company has appointed Shantanu Mitra as the new CEO and Managing Director. The appointment is with effect from April 2, it said in a statement.

Mitra has over 40 years of experience in financial services, with over 20 years at Standard Chartered and Citibank, where he had stints in India, Singapore and Thailand. His last role in Standard Chartered was Senior Regional Risk Officer, India, Middle East and Africa. His previous experience with Fullerton included a stint from 2010 to 2017.

Our Bureau

India’seconomic recovery appears to have entered into a consolidation phase in January 2021, with the year-on-year (y-o-y) performance of a majority of the early available economic indicators recording a loss of momentum relative to the previous month, according to ICRA.

This loss of momentum is led by a combination of factors, such as the fading of the favourable base effect, supply-side issues and price hikes.

Aditi Nayar, Principal Economist, ICRA, opined that a majority of these early economic indicators lost steam in January 2021, relative to December 2020, partly because of an unfavourable base effect, supply-side issues and price hikes, marking a contrast to the improvement in sentiment brought on by the rollout of the Covid-19 vaccines.

“We do not construe the dip in volume performance of a majority of the lead indicators in January 2021 as a sign of alarm regarding the sustainability of the growth recovery.

“However, we do caution that the pace of underlying growth in the Indian economy remains subdued, and do not foresee a sharp ramp up in the pace of GDP expansion in Q4 FY21,” said Nayar.

Per a ICRA note, as many as nine of the 15 high-frequency indicators recorded a weakening of their y-o-y performance in January 2021, relative to December 2020.

“This sub-set includes the output of the passenger vehicles (PVs), motorcycles and Coal India Limited (CIL), vehicle registrations, petrol consumption, ports cargo traffic, generation of GST e-way bills, bank credit and deposits,” the agency said.

In contrast, six indicators – non-oil exports, electricity generation, rail freight traffic, scooter production, diesel consumption and domestic airline traffic – witnessed an improved y-o-y performance in January 2021, relative to December 2020.

The number of indicators displaying a y-o-y contraction rose to five in January 2021 from three in December 2020, with PV production, vehicle registrations and CIL’s output getting added to this sub set.

Based on available data, ICRA projected the growth in the Index of Industrial Production to remain muted at 0.5-2.0 per cent in January 2021 (+1.0 per cent in December 2020).

While it expects the technical recession to have ended already, the ratings agency anticipates that the pace of GDP growth, in real terms, will strengthen only modestly to 2.6 per cent in Q4 FY21 from 0.7 per cent in Q3 FY21.

Banking major HSBC, on Tuesday, said its India operations reported a profit before tax of $1.024 billion in fiscal year 2020, which was a 1.8 per cent increase compared to $1.006 billion in the previous fiscal.

India is the third largest contributor to HSBC’s Group profits, with Hong Kong and Mainland China being the top two contributors.

In its investor presentation, HSBC has outlined that along with Greater China and South East Asia, India will be a key driver of its future growth.

The bank plans to grow wealth and international wholesale banking divisions in India.

“The bank seeks to grow its market share in transaction banking, including trade and foreign exchange, driven by digital and new supply chain solutions,” said the investor presentation.

Top bank for NRIs

In wealth, it seeks to expand insurance and asset management and build position as the top foreign bank for Non-Resident Indians and top 10 insurance player.

“For overseas Indian customers, we will grow NRI hubs, enabled by digital and remittance proposition, addressing significant NRI footprint across HSBC,” the presentation said.

However, overall, on a global basis, HSBC reported 30 per cent drop in profit after tax to $6.1 billion in fiscal year 2020 from a year ago. Profit before tax was down 34 per cent to $8.8 billion due to higher expected credit losses and other credit impairment charges (ECL) and lower revenue, partly offset by a fall in operating expenses, it said.

Of the reported profits from India operations, the most significant contribution was from the global banking and markets division, which reported a profit before tax of $593 million in fiscal year 2020 versus $533 million in the previous fiscal 2019.

Commercial banking division reported profit before tax of $187 million in fiscal year 2020, slightly lower than $201 million a year ago.

Profit before tax of wealth and personal banking was also down to $16 million in fiscal 2020, compared to $67 million in fiscal 2019.

As on December 31, 2020, HSBC had a total workforce of 2,26,000 full-time employees. India is main centre of employment with 39,000 employees.