Category: Banking & Finance

HDFC to raise up to ₹5,000 cr via NCDs

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Housing Development Finance Corporation Ltd (HDFC) plans to raise up to ₹5,000 crore via private placement of secured redeemable non-convertible debentures (NCDs) of 10-year tenor at a coupon rate of 6.83 per cent.

The issue size is of ₹2,000 crore, with an option to retain oversubscription of ₹3,000 crore, said HDFC in a regulatory filing.

“The object of the issue is to augment the long-term resources of the Corporation. The proceeds of the present issue would be utilised for financing/ refinancing the housing finance business requirements of the Corporation,” the filing said.

The bid opening and closing date of the NCD issue is January 7, 2021. The pay-in date and deemed date of allotment is January 8, 2021. The NCDs carry an issue price of ₹10 lakh each and will be listed on the BSE and NSE.

An investor will have to subscribe to a minimum of 10 debentures and in multiple of one debenture thereafter.

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HDFC Bank registers double-digit growth in deposits and advances in Q3

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Private sector lender HDFC Bank reported double-digit growth in deposits and advances in the third quarter of the fiscal year.

In a regulatory filing on Tuesday, HDFC Bank said its advances grew by 16 per cent to ₹10.82-lakh crore as on December 31, 2020, compared to ₹9.36-lakh crore a year ago. This was a growth of around 4 per cent when compared to ₹10.38-lakh crore as of September 30, 2020.

Meanwhile, the bank’s deposits grew by 19 per cent in the third quarter of the fiscal to ₹12.71-lakh crore compared to ₹10.67-lakh crore as of December 31, 2019, and a growth of around 3 per cent compared to ₹12.29 lakh crore as of September 30, 2020.

The bank’s CASA ratio stood at around 43 per cent as of December 31, 2020, compared to 39.5 per cent as of December 31, 2019, and 41.6 per cent as of September 30, 2020.

“During the quarter ended December 31, 2020, the bank purchased loans aggregating ₹7,076 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited,” it further said.

On Tuesday, the bank’s scrip closed 0.71 per cent higher at ₹1,426.20 apiece on the BSE.

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Lakshmi Vilas Bank, YES Bank lead NPA pile-up among private banks in Karnataka

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In Karnataka non-performing assets (NPA) of all banks combined stood at ₹57,070.02 crore from a total of 28 lakh accounts.

“Agriculture topped the list of sectors with high NPAs at ₹17,772.87 crore (from 12.20 lakh accounts) and is followed by non-priority sector at ₹17,096.27 crore (7.73 lakh accounts), other priority sector is ₹11,470.07 crore (4.20 lakh accounts), MSME ₹8,887.42 crore (3.35 lakh), housing ₹1,332.88 crore (25,042) and education ₹510.51 crore (24,892),” a senior officer at Karnataka SLBC said.

As on September 30, 2020, NPAs in private banks category – Lakshmi Vilas Bank (the bank since November 2020 has been merged with DBS Bank India Ltd (DBIL), the subsidiary of DBS Bank, Singapore) stood out with NPAs to the tune of ₹2,979.10 crore from 15,190 accounts, while YES Bank’s NPA stood at ₹4,675.23 crore from 946 accounts.

Among the lead banks category – Canara Bank’s total NPA stood at ₹12,531.66 crore (with 3.41 lakh accounts), State Bank of India ₹11,663.58 crore (7.37 lakh accounts). Under nationalised banks – Punjab National Bank with ₹4,121.52 crore (12,735 accounts) and Bank of India is ₹1,069.85 crore (19,477 accounts).

“SLBC has requested the Karnataka government to provide guidance and assistance for the recovery of bad loans,” the officer said.

On the recovery front, banks in the state have recovered a total of ₹460.87 crore so far under Sarfaesi, DRT and Lok Adalats Acts. Of the recoveries under Sarfaesi was ₹114.25 crore, DRT ₹335.19 crore and Lok Adalat ₹11.43 crore.

Education loan

Banks in the State up to September quarter have disbursed education loans to the tune of ₹650 crore covering 30,102 students, as against the annual financial target of ₹7,725 crore under both priority and non-priority segments.

According to the officer “The performance of banks in lending under education loans as the percentage of achievement v/s target is 8.41 percent. This poor loan disbursal is mainly due to the education sector getting affected due Covid-19 pandemic.”

“At the SLBC meet in December 2020, member banks were told to sanction more under education loans to the eligible students to achieve the target,” he added.

Due to record rains and flooding in the State, banks were asked to restructure loans in natural calamity affected districts. Due to unprecedented rains and flooding in August – 23 districts and 130 taluks were affected. In September – 16 districts and 43 taluks got affected and in October – 5 districts and 7 taluks got affected.

After the revenue department submitted crop-wise loss data for September quarter, about 230 accounts amounting to ₹5.15 crore were re-structured.

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HDFC sees ‘robust’ growth in individual loan disbursements

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Housing Development Finance Corporation Ltd (HDFC) reported a 26 per cent increase in individual loan disbursements.

“The individual loan business continued to see improvements during the quarter ended December 31, 2020. Disbursement growth over the corresponding quarter of the previous year was 26 per cent,” said HDFC in a regulatory filing on provisional numbers for the third quarter of the fiscal.

For the nine months ended December 31, 2020, individual loan disbursements stood at 86 per cent of the levels in the corresponding period of the previous year, it further said.

“During the quarter ended December 31, 2020…the Corporation assigned loans to HDFC Bank amounting to ₹7,076 crore, compared to ₹4,258 crore in the corresponding quarter of the previous year,” it further said.

Gross income from dividend for the quarter ended December 31, 2020, was ₹2 crore, compared to ₹4 crore in the corresponding period last fiscal.

During the quarter ended December 31, 2020, the profit on sale of investments was ₹157 crore, HDFC further said.

“This was on account of the sale of 25,48,750 equity shares of HDFC Life Insurance. The Corporation’s shareholding in HDFC Life now stands at 49.99 per cent. This has met the RBI’s mandate of reducing the Corporation’s shareholding in HDFC Life to 50 per cent or below by December 16, 2020,” it said, adding that for the purpose of consolidated financial results under IndAS, however, HDFC Life shall continue to be accounted as a subsidiary.

On Tuesday, HDFC’s scrip closed at a gain of 2.78 per cent at ₹2,651.15 apiece on the BSE.

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Private banks in Karnataka lead in NPAs

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The non-performing assets (NPAs) of all banks, in Karnataka,from 28 lakh accounts was ₹57,070.02 crore as on September 30, 2020.

“Among the sectors with high NPAs was agriculture at ₹17,772.87 crore (from 12.20 lakh accounts), other priority sector advances was ₹11,470.07 crore (4.20 lakh accounts) and non-priority sector advances was ₹17,096.27 crore (7.73 lakh accounts),” a senior official at Karnataka State Level Bankers’ Committee (SLBC) said.

Among the private banks, NPAs in Lakshmi Vilas Bank was ₹2,979.10 crore from 15,190 accounts, while those from Yes Bank was₹4,675.23 crore from 946 accounts.

Among the lead banks category, Canara Bank’s total NPAs stood at ₹12,531.66 crore (with 3.41 lakh accounts), State Bank of India at ₹11,663.58 crore (7.37 lakh accounts). Punjab National Bank with ₹4,121.52 crore (12,735 accounts) and Bank of India ₹1,069.85 crore (19,477 accounts).

“SLBC has requested the Karnataka government to provide guidance and assistance for the recovery of bad loans,” the official said.

On the recovery front, banks in the State have recovered ₹460.87 crore so far under Sarfaesi, DRT and Lok Adalats Acts. The recoveries under Sarfaesi were ₹114.25 crore, Debts Recovery Tribunals (DRT) at ₹335.19 crore and Lok Adalat at ₹11.43 crore.

Poor loan disbursal

On September quarter, the banks have disbursed education loans of ₹650 crore, covering 30,102 students, as against the annual financial target of ₹7,725 crore under both priority and non-priority segments.

According to the official, “The performance of banks in lending under education loans, as the percentage of achievement v/s target, was 8.41 per cent. This poor loan disbursal was mainly due to the education sector getting affected due to the Covid-19 pandemic.”

“During the SLBC meet in December 2020, member banks were told to sanction more education loans to eligible students to achieve the target,” he added.

Due to record rains and flooding in the State, banks were asked to restructure loans in natural calamity-affected districts. After the revenue department submitted crop-wise loss data for September quarter, about 230 accounts amounting to ₹5.15 crore were re-structured.

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Ayushman Bharat crosses 1.5-cr mark in hospital admissions as non-Covid-19 treatments resume

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With Covid cases on the decline and people resuming treatments for other ailments, Ayushman Bharat, the flagship health insurance scheme of the Centre, has crossed the landmark of 1.5 crore in total hospital admissions.

 

The surge in the number of persons availing the scheme is clearly visible in the last three months, with an addition of about 24 lakh hospital admissions.

As on January 4, 2021, the total hospital admissions under Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB -PMJAY) stood at 1,50,66,436, as per the latest data. This involved a spend of about ₹17,000 crore. As on September 21, 2020, 1.26 crore hospital admissions were registered.

“In the main Covid-19 months, the number of hospital admissions was somewhat slower due to the halt of other non-emergency treatments by many hospitals.

“But now with the recent decline in new cases of the pandemic, people are going for treatment of other ailments as well,” a senior official told Business Line on Monday.

The scheme was launched on September 23, 2018, in Ranchi. It now has 24,180 empanelled hospitals with over 13 crore e-cards issued. It covers about 1,500 procedures, including Covid-19. Under the scheme, the Centre provides a cover of up to ₹5 lakh per family per year for secondary and tertiary care hospitalisation to about 60 crore beneficiaries.

Covid treatment

As per provisional numbers, about 40,000 have been treated for Covid-19 so far under the scheme, besides over 4 lakh tests performed.

In times of Covid, the scheme was used by migrant workers in large numbers, especially after the introduction of portability (allowing people to avail the cashless treatment facility in any State, irrespective of their nativity), with an aim to provide access to health care during the lockdown period last year.

The National Health Authority (NHA), which is the implementing agency for the scheme, also launched a campaign ‘Swasthya ki Chaanv, Shehar ho ya Gaanv’ to reach out migrant and educate and empower them to make use of free healthcare services under the scheme.

Going forward, Ayushman Bharat is expected to gain more traction as Telangana (that had refused to join the scheme two years ago) requested the Centre last week to extend the scheme to the State. Only Odisha and West Bengal are now out of the purview of the scheme.

The budget allocation for the implementation of AB-PMJAY has been increasing every year. While it was at ₹2,400 crore in 2018-19, it went up to ₹6,400 crore in 2020-21.

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Exim Bank raises $1 b via 10-year bond issue

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Export-Import Bank of India (India Exim Bank) on Tuesday said it has raised $1 billion via a 10-year bond issuance.

The coupon of 2.25 per cent is a record low for any 10-year bond issuance out of India and the issue was oversubscribed by more than 3.5 times, the financial institution said in a statement.

The funds will be used by the bank to support Indian project exports, overseas investment by way of long-term credit and its export lines of credit portfolio, it added.

David Rasquinha, Managing Director of India Exim Bank, said, “With the upsurge in GST numbers, improvement in GDP, and the recent approval of vaccines, the confidence in the India story is surging once again.

“With a strong market opening trade from India Exim Bank, many other Indian issuers are likely to follow suit to access the foreign currency bond market.”

Harsha Bangari, Deputy Managing Director, observed that India Exim Bank’s bond issuance is the only 10-year transaction by an Indian financial institution in the last one year.

The quasi-sovereign nature of the bank and the Emerging Market Bond Index Global (EMBIG) index eligibility of the bonds helped in the price tightening from the initial price guidance of CT10 (10-year US Treasury Bonds) + 185 basis points (bps) to the final CT10+145 bps, she added. One basis point is equal to one-hundredth of a percentage point.

In terms of geographic distribution, the bonds were distributed 55 per cent in Asia, 29 per cent in the US and 16 per cent in the EMEA (Europe, Middle East, Africa) region, India Exim Bank said.

In terms of distribution, the bonds were distributed to fund managers (around 68 per cent), sovereign wealth funds, central banks and insurance companies (17 per cent), banks (14 per cent) and private banks and others (1 per cent), it added.

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IndusInd Bank reports 11% growth in Q3 deposits

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Our Bureau

Private sector lender IndusInd Bank reported an 11 per cent growth in deposits in the third quarter of the fiscal compared to a year ago, though advances remained flat.

According to provisional numbers released for the quarter ended December 31, 2020, IndusInd Bank’s deposits grew 11 per cent to ₹2.39-lakh crore against ₹2.16-lakh crore in the same period a year ago. Its deposits amounted to ₹2.28-lakh crore at the end of the second quarter this fiscal.

“Retail deposits and deposits from small business customers amounted to ₹85,914 crore as of December 31, 2020, compared to ₹75,610 crore as of September 30, 2020,” it further said.

Net advances remained flat at ₹2.07-lakh crore at the end of the third quarter this fiscal. It was marginally lower at ₹2.01-lakh crore as on September 30, 2020.

The bank’s CASA ratio was 40.5 per cent as on December 31, 2020, versus 40.4 per cent in the previous quarter and 42.4 per cent a year ago.

On Tuesday, its scrip closed 2.68 per cent higher at ₹921.6 a piece on the BSE.

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Kotak Securities launches start-up investment and engagement programme

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Kotak Securities on Tuesday announced the launch of its maiden Start-up Investment and Engagement Programme.

“Through this programme Kotak Securities will incubate and invest in innovative fintech and technology start-up companies,” it said in a statement.

It has set up an exclusive Corporate Development Department (CDD) for the initiative, with an initial investment corpus of Rs 50 crore.

Kotak Securities will launch incubation/accelerator programmes, hackathons, networking events, pitching sessions and demo day programmes for early stage start-ups in-house as well as with other incubator/accelerator groups.

“We strongly believe technology innovation will gauge the competitiveness of a broking firm; however, developing technology involves money and time. It is with this purpose that we have launched our investment and engagement programme, where we will partner and pick minority stake in fintech companies,” said Jaideep Hansraj, Managing Director and CEO, Kotak Securities.

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Bitcoin falls after a spectacular rally; what led to this?, BFSI News, ET BFSI

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Bitcoin took a downfall around 17% after a long rally which began in March 2020 with touching new highs around $34,800 a whopping 800% increase.

However, the world’s most popular cryptocurrency sank 17% wiping out the gains which were made over the start of 2021.

Sumit Gupta, Co-Founder & CEO at CoinDCX, India’s largest crypto-exchange said, “Bitcoin’s growth is largely attributed to how it is designed and in May 2020, we witnessed third halving , a supply shock event, where the number of daily mined Bitcoin gets cut in half. In the previous 2 halvings, Bitcoin and overall crypto market cap has risen exponentially, and a similar trend is expected this time around.”

The adoption came largely from institutional investors and institutions across the globe.

Sumit explained how Microstrategy included Bitcoin in their company’s treasuries and payment rails like PayPal, Square are integrating cryptocurrencies due to rising demand from retail investors. He added, “In 2021, if the increase in Bitcoin’s demand continues we can expect even greater demand from institutional investors, hedge funds, family offices, and from retail investors as well.”

Arjun Vijay, Co-Founder & COO at Giottus Cryptocurrency Exchange has noticed more and more BTC leaving exchanges across the world, 19% more transfer than the 2017 price increase, which is a signal that investors are holding BTC as long-term investments. UK-based Ruffer investment, a recent example of investors looking to hedge their investment, had invested 2.7% of its AUM in Bitcoin in November 2020. Even Insurance companies like MassMutual, the Massachusetts insurance firm with $235 Billion in AUM, dipped its toes into Bitcoin with a $100 million purchase.

Vijay believes that with more players joining the bandwagon we will be noticing more price increases in the days to come. Also, a lot of new investors are waiting for a correction to enter this rally but Bitcoin price growth has been relentless all this while.

On the crash of 2018, Sumit noted, “This is the first time we are witnessing such a huge demand from such large players at such a scale. This is significantly different from 2017, where the huge demand was primarily from retail investors, followed by a crash in 2018.”

If the global demand from institutions and investors continues, we might see higher price action in coming months and years.



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