Tag: Axis Bank Ltd.

Shares of HDFC Bank rise as RBI lifts credit card ban, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: Shares in HDFC Bank Ltd jumped after the Reserve Bank of India (RBI) said it would allow the lender to issue new credit cards, partially removing a months-long ban.

The lender will roll out the preparations and strategies it has put in place to “come back with a bang” in credit cards, it said in a statement. It will also “continue to engage with RBI and ensure compliance on all parameters,” it said.

The stock gained as much as 3.4%, the most since May 21, after the bank confirmed the easing of curbs in a stock exchange filing Wednesday, following a Bloomberg News report. Shares were trading 0.6% higher at 1:55 pm in Mumbai.

Still, the central bank will retain a ban on the lender launching new digital products “until further review.”

While recommending a ‘buy’ for HDFC Bank given its attractive valuation, Jefferies India analyst Prakhar Sharma wrote that the bank needs to enhance investment in its technology capacities and strengthen backend monitoring. This will give the RBI greater comfort for lifting the remaining restrictions.

Online glitches

About eight months ago, the country’s most valuable lender was penalized by the RBI for repeated online glitches that hurt its 50 million customers. Following the curbs, the bank, India’s top credit card issuer, lost out to peers including State Bank of India, ICICI Bank Ltd and Axis Bank Ltd.

HDFC Bank’s credit card outstandings shrank by 6.5% in the June quarter from the previous three months, hurting its overall retail portfolio.

The bank has been in the process of setting up digital and enterprise units to strengthen its online infrastructure and handle a larger volume of transactions.

In February, the banking regulator appointed an external audit firm to look into the recurring outages.



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FPI holding in Axis Bank hit record high in December quarter, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: Foreign portfolio investors’ stake in Axis Bank hit an all-time high of 51.02 per cent in the December quarter, according to shareholding data released on Tuesday.

FPI holding in the private lender stood at 49.24 per cent in the September quarter, and had last hit a high of 50.75 per cent in the quarter ended September 2016.

As per the data, Axis Bank had 991 FPIs as of December 31, including Europacific Growth Fund, which owned a 1.9 per cent stake in the bank, Government of Singapore (1.06 per cent), Fidelity Investment Trust (Fidelity Series Emerging, 1.12 per cent), Oakmark International Fund (1.70 per cent), Dodge and Cox International Stock Fund (2.78 per cent), Vanguard Total International Stock Index Fund (1.10 per cent), Government Pension Fund Global ( 1.21 per cent) and BNP Paribas Arbitrage (1.16 per cent).

On Tuesday, shares of Axis Bank were trading 0.4 per cent higher at Rs 669.85 on BSE.

The scrip has rallied 135 per cent over its 52-week low of Rs 285.

Emkay Global said in its results preview that Axis Bank’s growth remains moderate, but an already high provisioning buffer should lead to reasonable profitability in the third quarter.

Slippages could remain elevated including proforma for Q2, it said, suggesting that one should watch out for corporate stress.

The bank is seen reporting a 7.1 per cent rise in net profit to Rs 18,82 crore, compared with Rs 1,757 crore in the year-ago period. Net interest income (NII) is seen growing 16.5 per cent YoY to Rs 7,515 crore from Rs 6,453 crore in the corresponding quarter last year. Net interest margin is seen flat at 3.6 per cent.

YES Securities said it expects the bank’s provisioning to be lower in Q3 than Q2, given the substantial buffer held by the bank. It expects growth on the back of retail and SME segments.

Motilal Oswal expects credit cost to stay elevated for the lender. Restructuring, and the BB and below pool will remain under watch, it said.

The bank will announce its third quarter results on January 27.



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