Tag: axis bank

Banks, NBFCs see home loan delinquencies rise as pandemic hits borrowers, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


It’s not just retail, non-collateralised loans that are seeing delinquencies. Home loans that are mortgage-backed are seeing stress due to the pandemic.

Home loans of many banks have seen signs of stress with data from IMGC, a leading guarantor of such advances pointing to

an increase of nearly three times in the mortgage delinquency pool over the past 15 months.

IMGC guarantees home loans for about 20 lenders, including the State Bank of India, Housing Development Finance Corp, ICICI Bank and Axis Bank.

The number of claims paid by IMGC has gone up three times in June since March 2020, but it feels that the worst is over for the segment and the situation will stabilise in the next six months.

LIC Housing Finance

LIC Housing Finance has said there has been an increase in delinquencies, mostly due to economic activities being impacted in Q1. With improvement in economic activities and our increased and focused efforts in recovery, it was confident of controlling the same.

For LIC Housing Finance, on the asset quality, the stage-3 exposure at default worsened to 5.93%, from 4.12% a quarter ago and 2.83% a year ago.

There was a sharp deterioration in asset quality across product segments. Developer/Project GNPA deteriorated to 24.4% (down 640 bps quarter on quarter). According to brokerage estimates, in addition GS3, its Developer/Project book has at least 25% of restructured advances and ~16% in Stage 2.

Total restructured advances of LIC Housing Finance stood at Rs 5,350 crore (of which an estimated 88% were loans to corporate/developers). Against this, LICHF has made additional provisions of Rs 5,000 crore. Around Rs 1,500 crore of Covid-related provisions were booked in the First quarter

Housing finance companies

Non-bank lenders have restructured loans worth 1.6% of their overall book. Out of this while housing finance companies restructured about 1.0% of their AUM, other NBFCs restructured about 2.2%.

According to the rating agency Icra, the restructured book for non-bank lenders is expected to move up to 4.1-4.3% by March 2022 while the same for housing finance companies is estimated to go up to 2.0-2.2%.

The second wave of the Covid pandemic significantly impacted the collection efforts of non-bank lenders especially those in the business segments of vehicle finance, business loans and micro finance, who witnessed their collection efforts decline by about 20-25% in May 2021 versus March 2021. The efficiency improved by 3-5% in June 2021.

TThe loans due beyond 90 days, in March 2021 increased by only 30-40 bps over March 2020 levels, as the collections had improved steadily. Several institutions resorted to high quantum of loan write-offs in the fiscal year gone by which was estimated to be about 1.6% of the total assets under management, which is higher by about 60 basis points over the last fiscal.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

Police, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Palghar (Maharashtra), Former Manager of Axis Bank, Anil Dubey – who looted the ICICI Bank and killed a woman Deputy Manager on Thursday – has now been charged with allegedly cheating his immediate previous employer of Rs 26.84 lakh (Rs 2.68 mn), police said here on Saturday.

The huge amount was found missing during a recent audit of the cash reserves at the Axis Bank’s Naigaon Branch where Dubey was the manager before he was abruptly sacked on Friday, hours after the sensational ICICI Bank Virar East Branch heist and murderous attacks on two women staffers inside the bank premises.

The Waliv Police Station has registered a complaint of the missing amount under various sections of the Indian Penal Code and investigations are currently on, said an official.

“The discrepancy was found during the routine monthly tally of accounts and reported to the top authorities. Thereafter, an internal investigation has been launched and we have also lodged an FIR with the police,” an official of Axis Bank told IANS, requesting anonymity.

Simultaneously, the bank is attempting to confirm whether Dubey – who had joined Axis Bank in August 2020 – had cheated its customers or indulged in any other scams or misappropriation of public money.

Apprehending action from the Axis Bank or the police after his misdeeds were discovered in the past few days, he had skipped office during the week, but by the weekend masterminded the ICICI Bank heist to clear off his outstanding dues at one go.

Officials reveal that since he had served ICICI Bank for 15 months, he was on good terms with the staffers there, well acquainted with the bank’s routine activities.

These and other details may have helped him commit the daring – but unsuccessful – loot attempt on Thursday (July 29) night as the bank would be closed for the weekend after the July month-end accounts tally.

As his escape attempt was foiled by the local people, the Virar Police recovered the booty comprising cash and gold totally valued at around Rs 3.38 crore, said Senior Police Inspector Suresh Warade.

Dubey was produced before a Vasai Magistrate Court which remanded him to police custody till August 6, under charges of dacoity, attempt to murder, murder, theft, etc.

Meanwhile, the condition of the injured cashier Shraddha Devrukhkar – who was attacked by Dubey with a cut-throat razor, remains worrisome and she has been shifted to Lilavati Hospital in Mumbai.

“She is still in deep shock due to the bloody assault on her and also her senior colleague and close friend, Yogita Vartak Choudhary, who succumbed on Thursday,” said another staffer.

Owing to the serious injuries on her neck, shoulder and other parts, Devrukhkar, 32, is communicating through signs with her family, police and bank colleagues.

Dubey, 38, with over 15 years of experience in the banking sector, had piled up huge debts through a lavish lifestyle, expensive tastes, certain investments in lucrative residential/commercial properties, etc, though the sources of his finance are still not clear.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

RBI’s current account rule kicks in, hits small firms, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Small businessmen and firms are hit as banks rush to meet the July 31, Reserve Bank of India deadline for not opening current account for borrowers who have loans with other banks

Banks are freezing current accounts of firms with more than 10% loans with other banks. Mostly small firms are hit as large corprates have their loans spread across banks.

The circular

In its August 6, 2020, circular, the regulator had mandated that no bank shall open current accounts for customers who have availed credit facilities in the form of CC/OD from the banking system, and all transactions shall be routed through the CC/OD account. The RBI moved was targeted to ensure greater discipline and transparency in the way large borrowers move funds.

Banks can have current accounts for that bank which accounts for at least 10% of its loans, according to RBI rules.

It had said that in the case where a bank’s exposure to a borrower was less than 10% of the banking system’s exposure to that borrower, debits to the CC/OD account can only be for credit to the CC/OD account of that borrower with a bank that has 10% or more of the exposure of the banking system to that borrower.

The circular was to be implemented by January this year. However, with banks dragging their feet, the central bank has imposed July 2021 as a final deadline.

However, small borrowers who use one bank to borrow and another for transactions will no longer be able to do so.

Several entrepreneurs, who do banking with private banks for their superior service, but have loans with public sector banks have been hit by the circular as their accounts are frozen.

Big banks gain

The Reserve Bank of India’s (RBI) insistence on companies opening current accounts with banks is among the factors that have helped large lenders such as HDFC Bank, ICICI Bank and SBI raise their shares of the competitive corporate banking market in 2020, according to a report.

The RBI had come up with the circular that specified which bank can open a current account for a borrower, in order to check any misuse through multiple current accounts.

A fourth of the large and medium corporates said they were banking with at least one among ICICI Bank, Axis Bank and HDFC Bank as against 17 per cent in 2016, it said adding that the private sector banks have grown at over 25 per cent per year.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

RBI imposes Rs 5 crore penalty on Axis Bank, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


The Reserve Bank of India (RBI) on Tuesday said it has imposed a penalty of Rs 5 crore on Axis Bank for contravention of certain provisions of directions issued by the RBI, including on cybersecurity framework. The penalty has been imposed for “contravention of/non-compliance” with certain provisions of directions issued by the RBI. They include ‘Strengthening the Controls of Payment Ecosystem between Sponsor Banks and SCBs/UCBs as a Corporate Customer’; ‘Cyber Security Framework in Banks’; and ‘Reserve Bank of India (Financial Services provided by Banks) Directions, 2016′.

They also include ‘Financial Inclusion-Access to Banking Services-Basic Savings Bank Deposit Account’; and ‘Frauds-Classification and Reporting’.

The RBI said the statutory inspections for supervisory evaluation (ISE) of the bank were conducted with reference to its financial position as on March 31, 2017, (ISE 2017), March 31, 2018, (ISE 2018), and March 31, 2019 (ISE 2019).

The contravention of/ non-compliance with the directions has been revealed by – the examination of the Risk Assessment Reports pertaining to ISE 2017, ISE 2018 and ISE 2019; the report of scrutiny carried out by RBI in the backdrop of the incident relating to a fraud and related correspondence thereto; and the incident report submitted by the bank in June 2020 related to a few suspected transactions and related correspondence.

Notices were issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions.

After considering the bank’s replies, oral submissions, and examination of additional submissions made by the bank, the RBI came to the conclusion that the charges of non-compliance with/contravention of the directions were substantiated and warranted imposition of monetary penalty, the central bank said.

The RBI, however, added the imposition of penalty is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Meanwhile, the RBI has also imposed a penalty of Rs 5 lakh on Alibag Co-operative Urban Bank Limited, Raigad, and Rs 1 lakh on The Mahabaleshwar Urban Cooperative Bank Limited, Mahabaleshwar, for deficiencies of regulatory compliance.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

ICICI, Axis and HDFC Bank pick up stake in blockchain start-up

Banking & Finance

[ad_1]

Read More/Less


Private sector lenders including HDFC Bank, ICICI Bank and Axis Bank have picked up a stake in blockchain technology focussed start-up IBBIC Pvt Ltd.

In separate stock exchange filings on Tuesday, HDFC Bank and Axis Bank said they have picked up 50,000 equity shares amounting to 5.55 per cent stake in IBBIC.

HDFC Bank and Axis Bank invested ₹5 lakh each for the shares.

ICICI Bank also said it has subscribed to 49,000 fully paid-up equity shares of face value ₹10 each of IBBIC constituting 5.44 per cent of the issued and paid-up share capital. It paid ₹4.9 lakh for the shares.

IBBIC was incorporated on May 25 this year as a financial technology company with the objective of providing a platform for exploring, building, and implementing distributed ledger technology (DLT) solutions for the Indian financial services sector.

About 15 banks have come together to set up IBBIC, with an aim to expand the use of blockchain application in financial sector transactions.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Axis Bank buys 5.55% stake in financial technology firm IBBIC

Banking & Finance

[ad_1]

Read More/Less


Axis Bank on Tuesday said it bought 5.55 per cent stake in financial technology firm IBBIC.

The bank has subscribed to 50,000 equity shares of face value of ₹10 each fully paid up of IBBIC for a consideration of ₹10 per equity share constituting 5.55 per cent of the issued and paid up capital of IBBIC, Axis Bank said in a regulatory filing.

DLT solutions

Incorporated in May this year, IBBIC platform offers distributed ledger technology (DLT) solutions to the Indian financial services sector.

“Equity ownership of IBBIC is aimed at providing DLT solutions for the financial services sector,” Axis Bank said.

The equity is acquired for a cash consideration of ₹5 lakh, it said.

DLT, more commonly known as blockchain technology, is a protocol to enable secure functioning of a decentralised digital database. It stores information securely using cryptography.

Stock of Axis Bank traded 2.47 per cent down at ₹737.45 apiece on the BSE.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Private banks hold on in second Covid wave in Q1, but retail stress grows, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Private banks have posted first-quarter results that are in line with analyst expectations, less deterioration in asset quality, though they are seeing stress in retail and gold loans.

Axis Bank

Axis Bank’s net profit almost doubled to Rs 21.6b in 1QFY22, with a PPOP of Rs 6420 crore, up 10% YoY. Net interest income grew 11% YoY, while margin fell 10bp QoQ to 3.46% due to interest reversals on slippages, higher liquidity, and change in product mix.

The bank has delivered an in-line performance, even as slippages stood elevated, resulting in a slight deterioration in asset quality. On the business front, loan growth remains flat due to a muted business environment, while margin witnessed a sequential decline. On asset quality, total restructuring stood controlled at 0.44% of loans (including approved, but not implemented). Though slippages could remain elevated in the near term, healthy provision coverage ratio of 70%, coupled with additional provisions buffer of 2%, would likely protect the Balance Sheet against any potential stress.

Kotak Mahindra Bank

Kotak Mahindra Bank reported an in-line core operating performance in a challenging environment, despite muted loan growth across most segments.

Private banks hold on in second Covid wave in Q1, but retail stress grows

Asset quality deteriorated slightly led by the secured Retail segment. Standalone PAT grew 32% but consolidated PAT declined by 3% YoY on account of weaker performance from subsidiaries, mainly Kotak Life and Kotak Prime.

Loan book fell 3% QoQ (up 6.6% YoY) to Rs 2.2 lakh crore, led by a decline across most segments. On the liability front, CASA growth remains steady, driving CASA mix to 60.2% (highest in the industry).

On the asset quality front, slippages stood elevated at Rs 1500 crore (annualized 2.8% of loans) mainly from Tractors, CV/CE, and the Small Commercial segment. GNPA/NNPA ratio rose by 31bp/7bp QoQ to 3.56%/1.28%. The bank carries COVID-related provisions of Rs 1280 crore (0.6% of advances), which remains unchanged.

The bank continues to report steady progress in building a strong liability franchise, with a CASA ratio of an estimated 60% (highest in the industry). Asset quality was affected due to the second Covid wave, which hampered collections, thus driving elevated slippages. The restructured book remains under control ~0.25% of loans. The bank carries Covid-related provisions of Rs 1,280 crore (0.6% of advances).

ICICI Bank

ICICI Bank reported strong earnings performance, led by robust core PPOP, aided by healthy NII growth (5bp NIM expansion). Also, lower provisions drove the earnings. The bank is thus progressing well towards earnings normalization.

Fresh slippages stood elevated at Rs 7,230 crore (annualized 4% of loans), predominantly from the retail/business banking portfolio. However, this was partially compensated by higher recoveries and upgrades. The GNPA/NNPA ratio grew by 19bp/2bp QoQ to 5.15%/1.16%. PCR remains stable at 78.4%, the highest in the industry. Restructured loans stood controlled at 0.7% of loans versus 0.5% in FY21.

ICICI Bank holds Covid related provisions of Rs 6,425 crore (0.9% of loans), despite utilizing provisions of Rs 1050 crore in 1QFY22. It guided at improved asset quality trends mainly from 2HFY22.

Private banks hold on in second Covid wave in Q1, but retail stress grows

The steady mix of the high yielding portfolios such as retail/business banking portfolio, deployment of excess liquidity, and low-cost liability franchise is aiding margin expansion. Covid has disrupted collections, leading to elevated slippages in the retail/business banking portfolio. However, the management is confident of improved asset quality trends over FY22, mainly from 2H onwards. Restructured loans remain under control at 0.7% of loans. Provision coverage remains best in the industry and additional Covid provision buffer (0.9% of loans) provides comfort on normalization in credit cost. We expect RoA/RoE to improve to 1.8%/15.3% for FY23E.

Federal Bank

FB reported a net profit of Rs 370 crore in 1QFY22, led by strong other income (recovery from a written-off account and treasury gains of INR2.6b). It prudently deployed these gains towards provisions, which stood elevated at INR6.4b (63% YoY increase), to further strengthen its Balance Sheet.

The bank posted a moderation in business growth, with loans across most segments declining sequentially. Deposit growth was muted, while the CASA ratio touched ~35% (record high levels). The share of Retail deposits rose to 93% of total deposits. Around 60% of Retail slippages came from the Home loan portfolio, with the rest mainly from the LAP segment.FB expects slippages in FY22 to remain at a similar trajectory as the last two years.

Private banks hold on in second Covid wave in Q1, but retail stress grows
Its restructured book is fully secured. The bank expects LGDs to remain low. Most of its Retail restructured book constitutes Home loans, LAP, etc. Collections efficiency in this portfolio stands at 95%, which is in line with its other portfolio.

FB reported a slight moderation in business growth owing to a challenging environment and lockdowns across several states. However, the bank’s liability franchise remains strong, with Retail deposit mix ~93% and CASA ratio at a record high of 35%. On the asset quality front, slippages stood elevated from the Retail/Agri/SME segments as the second Covid wave has severely affected the Self-employed segment and impacted the rural economy as well. The bank prudently utilised higher treasury gains/one-off recovery from written-off accounts towards provisions to further strengthen its Balance Sheet and stabilise PCR.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

Net profit rises 94% YoY, misses estimate; NII rises 11%, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


MUMBAI: Axis Bank today reported a 94 per cent year-on-year rise in net profit to Rs. 2,160 crore for the quarter ended June, which was above analysts’ estimate.

The lender reported a 11 per cent on-year growth in net interest income to Rs. 7,760 crore in the reported quarter, which was also below Street’s estimate.

The lender saw a marked deterioration in its asset quality in the quarter likely due to the second wave of COVID-19 pandemic. The gross non-performing assets ratio stood at 3.85 per cent in the June quarter as against 3.7 per cent in the previous quarter.

Similarly, the net NPA ratio rose to 1.2 per cent in the quarter from 1.05 per cent in the previous quarter. The lender’s gross slippages in the quarter jumped 23 per cent sequentially to Rs. 6,518 crore and was nearly three times from the year-ago quarter.

As on June 30, the bank’s provision coverage, as a proportion of gross NPAs stood at 70 per cent, as compared to 75 per cent in the year-ago quarter and 72 per cent in the previous quarter.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,
1 … 6 7 8 9 10 … 14