Tag: banks

Know how Banks and Financials performed throughout the week, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Domestic benchmark indices witnessed some exhaustion this week, after a healthy rally seen in the past weeks, with the BSE Sensex gaining around 9% last month.

Developments around the US economy, revival of activity in Europe amid rising Covid-19 infections, improving economic data, positive earnings expectations and healthy pick up in daily inoculations were considered to be key market driving factors this week.

Last Friday, the BSE Sensex vaulted above the 58,000-mark, while the Nifty50 touched 17,300 points as investors cheered recovery in the economy.

Monday Closing bell: Market continues winning streak; banks and financials underperform

The Nifty50 had a gap up opening, but couldn’t build upon the early gains. The index traded in a narrow range throughout the day and consolidated its gains. During the second half, markets continued to trade on a positive note on the back of strong global cues and domestic economic activity. The Sensex was up 0.29% at 58,296.91, and the Nifty was up 0.31% at 17,377.80.

Bank Nifty closed with losses, ending 0.5% lower at 36,592 points, while Nifty Financial Services closed 0.3% lower at 18,077 points. Shares of IndusInd Bank fell 1.13% as the top laggard, followed by Kotak Mahindra Bank, and HDFC Bank.

Tuesday Closing bell: Market ends in red, banks, financials continue to lose

The Nifty50 had a cautious start on Tuesday, around levels of 17,400. All sectoral indices opened in the green, except for Nifty Bank. Domestic indices reached fresh all-time highs but failed to hold gains and ended the day with marginal losses. The Sensex closed at 58279.48 points, down 0.03%, while Nifty closed at 17362.10, down 0.09%.

Bank Nifty ended the 0.34% lower at 36,468 while Nifty Financial Services closed at 18,102 gaining 0.15%. Axis bank was among the top Nifty Losers while HDFC and IndusInd Bank were among the top gainers.

Wednesday Closing bell : Indices tad down; banks, financials among top gainers

Domestic equity indices rebounded from lows in the dying hour of trade to end flat with a negative bias, with mid and smallcaps outperforming the benchmarks. The Sensex and Nifty both ended flat, down 0.05% each at 58,250.26 points and 17,353.50 points, respectively.

Among sectors, Nifty Bank, private bank, PSU bank and financial services rose about a percent each. Bank Nifty gained 0.82% to end at 36,768, while Nifty Financial Services gained 0.57% closing at 18,207. Kotak Mahindra Bank jumped 3.5% to be the top index gainer.

Thursday Closing bell: Market closes on positive note; banks, financials underperform

Domestic indices started Thursday’s session on a flat note amid selling pressure seen in financial stocks. Sensex and Nifty both closed with a gain of 0.09%, higher at 58,305.07 and 17,369.25 respectively.

Nifty Bank ended in red at 36,683 down 0.23%, while Nifty Financial services closed at 18,160, down -0.26%. Kotak Bank and Bajaj Finserv were among top blue-chip performers. HDFC Bank, IndusInd Bank and SBI were among the volume toppers. Meanwhile, SBI Life, Axis Bank, Federal bank and Chola Invest were among the top losers.

Industry Key Takeaways

Tamilnad Mercantile Bank files IPO papers with SEBI
Private-sector lender Tamilnad Mercantile Bank has filed preliminary papers with Securities and Exchange Board of India to mop-up funds through an initial share-sale. The initial public offering (IPO) comprises fresh issue of 15,827,495 equity shares and an offer-for-sale of up to 12,505 equity shares by selling shareholders, according to the draft red herring prospectus (DRHP).

LIC Housing Finance partners with India Post Payments Bank
India Post Payments Bank (IPPB) and LIC Housing Finance on Tuesday announced a strategic partnership for providing home loan products to over 4.5 crore customers of IPPB. LIC Housing Finance was quoting at Rs 416.10, up Rs 11.35, or 2.80% on the BSE.

India’s fintech market to triple to ₹6.2 lakh cr by 2025: MoS Finance Karad
The government’s various initiatives have led to fast growth in the fintech sector, which is likely to triple to ₹6,20,700 crore in value terms by 2025, minister of state for Finance Bhagwat K Karad said on Wednesday.

Highlighting that India is a leader in adopting financial technology among emerging markets, he said, the country had an adoption rate of 87% in March 2020, as compared to the global average of 64%.

Paytm Money launches investment advisory marketplace on platform
Paytm Money, the wealth management division of digital payments major Paytm, on Tuesday said it is creating a wealth and investment advisory marketplace on its platform to offer curated advisory services and products to retail investors.

Paytm Money has partnered with investment startup WealthDesk to offer investment portfolios called ‘WealthBaskets’. A ‘WealthBasket’ is a custom portfolio of stocks and exchange traded funds (ETFs) created by SEBI-registered investment professionals.

India to post strong GDP growth in coming quarters: S&P
India is expected to post strong economic growth in the coming quarters, even as inflation, led by food prices, is likely to remain elevated, S&P Global Ratings said on Wednesday.

The economy is expected to clock 9.5 percent growth in the current fiscal year, followed by 7% expansion in the next year, it said, adding high nominal GDP growth would be important for ensuring fiscal consolidation going forward

Kotak Mahindra Bank slashes home loan rates by 15bps to 6.5%
Kotak Mahindra Bank announced today that it has reduced home loan rates by 15 base points, from Friday till November 8.

The bank is offering this rate in view of the upcoming festive period. The rate of 6.5% will be prevalent for both fresh home loans and balance transfers, and will be available across all loan amounts and is linked to a borrower’s credit profile.

UCO Bank shares spike 16% after RBI lifts PCA restrictions
UCO Bank shares received strong buying demand, rising as much as 15.9 percent on September 9 after the Reserve Bank of India lifted Prompt Corrective Action (PCA) restrictions on the bank.

“The performance of the UCO Bank was reviewed by the Board for Financial Supervision under the RBI. As per published results for the year ended March 31, 2021, the bank is not in breach of the PCA parameters,” said the RBI in its press release published on September 8.



[ad_2]

CLICK HERE TO APPLY

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

Borrowers of syndicated loans over Rs 2,000 crore may not have to approach all lenders, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


The Reserve Bank of India is looking to revise guidelines and creating a new framework for syndicated loan arrangements of Rs 2,000 crore and above that would cut turnaround time.

The Indian Banks‘ Association has submitted a report to the RBI that looks into plugging the shortcomings in the existing arrangement.

How it will work?

Under the new framework, long-term borrowers need not approach all lenders for funding and getting sundry clearances.

It will have a detailed single point inspection of syndicated loan accounts and norms for a more structured approach by lenders to take care of the entire life cycle of the loan.

The new framework envisages the lead bank to draw terms and conditions, and setting up an independent administrative agent who manages the escrow account and routine loan inspections.

IBA will also be addressing issues such as information portal, drafting of common documents and identification of service providers.

The current system

At present, most consortium lending is down-selling of large value loans by the lead bank, while each bank comes up with its own additional terms and conditions.

Currently, the banking regulator supervises loan syndication through various circulars on loans and advances.

International model

The IBA also proposed strengthening the current ecosystem for the syndicated loan system and aligning it to international models such as those being practised in more developed financial markets.

The recommendations are in sync with the current framework followed in the US through Loan Syndications and Trading Association. The new framework may come up with specifics on minimum retention requirement, centralised supervisory oversight and audit, and development of a secondary market for corporate loans.

Banks will also explore whether such a model can deal with existing issues such as stressed assets and the issues relating to non-performing loans can be taken up while structuring security documents.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Banks Board Bureau recommends Atul Kumar Goel for PNB chief post

Banking & Finance

[ad_1]

Read More/Less


The Banks Board Bureau (BBB) has recommended the name of Atul Kumar Goel for the position of Managing Director & CEO of Punjab National Bank, the country’s second largest public sector bank.

Goel is currently the Managing Director & CEO of UCO Bank.

At PNB, Goel is expected to succeed Ch SS Mallikarjuna Rao, who is due to demit office in end-January.

On Wednesday, BBB interfaced with 11 candidates for the forthcoming position of PNB chief executive, sources in the banking industry said.

Last month, the Centre had extended the tenure of three MD and CEOs and 10 Executive Directors in various public sector banks. The three MD & CEOs who got an extension in tenures included Ch SS Mallikarjuna Rao and Atul Kumar Goel.

While Mallikarjuna Rao’s term got extended till January 31, the term of office of Goel was extended for two years till November 1,2023.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Banks may see stress rising in retail, MSME segments by March, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Domestic rating agency India Ratings on Tuesday maintained a stable outlook on the banking sector for 2021-22 while it expects an increase in stressed assets in retail and MSME segments by end-March.

It estimates gross non-performing assets (GNPA) of the banking sector to be at 8.6 per cent and stressed assets at 10.3 per cent for fiscal 2021-22.

“We have maintained a stable outlook on the overall banking sector for the rest of FY22, supported by the continuing systemic support that has helped manage the system-wide COVID-19 linked stress,” the rating agency said in its mid-year banks outlook released on Tuesday.

Banks will continue to strengthen their financials by raising capital and adding to provision buffers which have already seen a sharp increase in the last three to four years, it said.

Private banks

The agency said its stable outlook on large private banks indicates their continued market share gains both in assets and liabilities, while competing intensely with public sector banks (PSBs). Most have strengthened their capital buffers and proactively managed their portfolio.

Outlook on PSBs takes into account continued government support through large capital infusions (Rs 2.8 lakh crore over FY18-FY21 and further Rs 0.2 lakh crore provisioned for FY22), it said.

The agency has a negative outlook on five banks (about 6.5 per cent of system deposits), driven primarily by weak capital buffers and continued pressure on franchise.

It estimates that the asset quality impact in the retail segment has been higher for private banks with a median rise of over 100 per cent in gross NPAs over Q1 FY21 to Q1 FY22 (about 45 per cent for PSBs).

“Banks have also undertaken restructuring in retail assets (including home loans), which could have postponed an immediate increase in slippages. Overall stressed assets (GNPA + restructured) in the segment is expected to increase to 5.8 per cent by end-FY22,” the report said.

It said the MSME sector has been under pressure with demonetisation, introduction of GST and RERA, slowing down of large corporates and now COVID-19.

ECLGS stress

However, the government has supported the segment by offering liquidity under the Emergency Credit Line Guarantee Scheme (ECLGS) and restructuring, it said adding that it expects that beginning Q3 FY22, a portion of such advances would start exiting moratoriums a part of which could slip.

GNPAs of MSMEs is expected to increase to 13.1 per cent by end-FY22 from 9.9 per cent in FY21. Stressed assets similarly would increase to 15.6 per cent from 11.7 per cent.

For corporate segment, the agency estimates GNPAs to increase to 10.2 per cent and stressed asset to increase to 11.3 per cent.

The rating agency has kept its FY22 credit growth estimates unchanged at 8.9 per cent for FY22, supported by a pick-up in economic activity post Q1 FY22, higher government spending especially on infrastructure and a revival in demand for retail loans.

Last week, the agency had changed the outlook to improving from stable for retail non-banking finance companies (NBFCs) and housing finance companies (HFCs) for the second half of FY22.

It said non-banks have adequate system liquidity (because of regulatory measures), sufficient capital buffers, stable margins due to low funding cost and on-balance sheet provisioning buffers.

These factors provide ‘enough cushion to navigate the challenges that may emanate from a subdued operating environment leading to an increase in asset quality challenges due to the second covid wave impacting disbursements and collections for non-banks’, it had said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Heightened stress in retail, MSME segments due to Covid could weigh down banks, cautions Ind-Ra

Banking & Finance

[ad_1]

Read More/Less


 

India Ratings (Ind-Ra) has cautioned that heightened stress in retail and micro, small and medium enterprise (MSMEs) could push out the banking sector’s inflexion point.

The credit rating agency also said that upward movement in yield curve could weigh down banks’ profitability.

Ind-Ra observed that safe bastion retail lending has fallen as pandemic drives higher delinquencies.

Indian banks to feel the effect of Covid second wave long after infections fade: S&P Global

In the case of MSME, notwithstanding the support in the form of the emergency credit line guarantee scheme (ECLGS) and restructuring, slippages could reflect from 2HFY22.

The agency noted that the agriculture sector has seen limited impact of Covid. The incremental stress addition from corporate segment has been at low levels.

Continuing systemic support

Ind-Ra, however, has maintained a stable outlook on the overall banking sector for the rest of FY22, supported by the continuing systemic support that has helped manage the system-wide Covid-linked stress.

It observed that banks also continue to strengthen their financials by raising capital and adding to provision buffers, which have already seen a sharp increase in the last three to four years.

‘Significant impact on profitability of Indian banking system’

The agency, in its “Mid-Year Banks Outlook”, has kept its FY22 credit growth estimates unchanged at 8.9 per cent for FY22, supported by a pick-up in economic activity post 1QFY22, higher Government of India (GoI) spending, especially on infrastructure, and a revival in demand for retail loans.

For FY22, the agency estimates the banking sector’s gross non-performing assets (GNPAs) at 8.6 per cent (against 10.1 per cent forecast made in February 2021) and stressed assets at 10.3 per cent (11.7 per cent). It expects provisioning cost for FY22 to increase to 1.9 per cent from its earlier estimate of 1.5 per cent.

PvSBs: market share gains

“Ind-Ra’s Stable outlook on large private sector banks (PvSBs) indicates their continued market share gains, both in assets and liabilities, while competing intensely with public sector banks (PSBs).

“Most have strengthened their capital buffers and proactively managed their portfolio. As growth revives, large PvSBs are likely to benefit from credit migration due to their superior product and service proposition,”said Karan Gupta, Director.

The agency’s Stable outlook on PSBs takes into account continued government support through large capital infusions (₹2.8 lakh crore over FY18-FY21 and further ₹20,000 crore provisioned for FY22).

The government’s support to PSBs has resulted in a significant boost in their capital buffers over the minimum regulatory requirements, significant improvement in provision coverage to 68 per cent in FY21 (FY18: 49 per cent), overall systemic support resulting in lower-than-expected Covid stress and smooth amalgamation of PSBs, Gupta said.

As per Ind-Ra’s analysis of the impact of a reversal in the long-term yield curve on the investment portfolio of banks, it expects an adverse impact on the profitability with a 100 basis points upward shift in the yield curve.

This could impact the pre-provisioning operating profit of PSBs by 8 per cent and that of PvSBs by 3.2 per cent while for the overall banking system, the impact could be 5.8 per cent.

[ad_2]

CLICK HERE TO APPLY

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

ICICI Bank customers can now pay dues of other credit cards on iMobile Pay app, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Customers of ICICI Bank can now pay and manage dues of their credit cards, of any bank, using the bank’s mobile application ‘iMobile Pay‘, the bank said in a release today.

Customers can add credit cards of any bank to the application, and then pay and manage their dues.

“With a large section of customers using multiple cards for their various needs, this new solution aims to help them decongest the process of their credit card bill payments,” said Bijith Bhaskar, head of digital channels and partnership at ICICI Bank.

Users can also set bill payment reminders of all the cards they have added, view payment history, share payment confirmation through WhatsApp, and manage and change due dates as per the billing cycle of their cards, the bank said in the release.

The bank has also provided a simple 4-step process to avail this new feature:

> Login to iMobile Pay and select ‘Cards and Forex’ section

> Go to ‘Other Bank Credit Card’

> Tap on ‘Add a card’ and enter the required details

> Authenticate the one time password (OTP) sent on the registered mobile number, and card will be added instantly

> Once the card is added, it can be viewed and managed under the ‘Other Bank Credit Card’ tab



[ad_2]

CLICK HERE TO APPLY

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

Should you go for Shriram Transport FDs that offer up to 7.5% interest?

Personal Finance

[ad_1]

Read More/Less


Shriram Transport Finance Company (STFC) revised the interest rates on its fixed deposits last month. The company now offers 6.5 per cent and 6.75 per cent per annum, respectively on its one-year and two-year deposits. Three-year deposits can fetch you 7.5 per cent interest per annum. Senior citizens get an additional 0.3 per cent over these rates. Besides, the company offers an additional 0.25 per cent on all renewals.

At the current juncture, the STFC FD rates seem better than those offered by most banks and other similar-rated NBFCs. Though the company has never defaulted on its deposits, its current financials indicate some near-to-medium term stress in operations. Hence, investors with a high-risk appetite who seek additional returns, can invest in this FD. Do note, that unlike FDs offered by banks, those by NBFCs are not covered by the DICGC’s ₹5 lakh cover.

Investors can choose from monthly, quarterly, half yearly or annual interest payout options or the cumulative option where interest gets compounded and is paid at the time of maturity.

The minimum deposit amount is ₹5,000 and in multiples of ₹1,000 thereafter.

Investors who opt for the online route can choose from additional tenure deposits such as 15-month and 30-month deposits. The company offers 6.75 per cent and 7.5 per cent, respectively on such tenures, same as that offered on its two and three year deposits, respectively.

How they fare

As interest rates have bottomed out, rates are likely to inch up in the next two or three years. Hence, at the current juncture, it will be wise to lock into deposits with a tenure of one or two years only.

Currently banks (including most small finance banks) offer rates of up to 6.35 per cent per annum for one-year deposits and up to 6.5 per cent for two-year deposits. Suryoday Small Finance Bank however, offers 6.5 per cent on its one-to-two year deposits (both inclusive). While the rates offered by STFC are at par with those of Suryoday on the one-year FD, the former offers superior rates on deposits of other tenures. The rates on STFC’s deposits are also superior to those offered by similar-rated NBFCs.

The company’s FDs are rated FAAA(Stable) by CRISIL and MAA+ (Stable) by ICRA. Other AAA-rated NBFCs offer interest rates in the range of 5.25 to 5.7 per cent on their one-year deposits and up to 6.2 per cent on their two-year deposits.

About STFC

The company has a 42-year old track record of providing finance for commercial vehicles, predominantly in the high-yielding pre-owned HCV segment.

As of June 2021, its assets under management (AUM) totalled ₹ 1.19 lakh crore (up 6.75 per cent y-o-y ). About 90 per cent of the AUM was towards pre-owned vehicle loans and the rest was towards new vehicle loans (6 per cent), business loans (1.6 per cent), working capital loans (1.9 per cent) and other loans (0.1 per cent).

STFC has a strong branch network of 1,821 branch offices and 809 rural centres covering all states.

Given its heavy reliance on fleet and transport operators (HCV and construction equipment comprise about 48 per cent of its AUM and medium and light commercial vehicles constitute another 25.3 per cent), the company saw deterioration in asset quality in the recent quarter on account of lockdowns. In the June 2021 quarter, its gross Stage-3 assets worsened to 8.18 per cent from 7.06 per cent in the March 2021 quarter.

Even gross Stage-2 assets, which may slip to Stage-3 in the coming quarters, spiked to 14.53 per cent of the AUM compared to 11.9 per cent in the March quarter.

However, the company has a decent provision coverage ratio of 44 per cent and about 10 per cent for Stage 3 and Stage- 2 assets, respectively. Its is due to the spike in provisioning (up 35 per cent y-o-y) that the company saw a 47 per cent (y-o-y) drop in its net profit to ₹170 crore in the June 2021 quarter.

Besides, its proven past track record, strong capital and liquidity position offer additional comfort.

The company’s Capital to Risk Weighted Assets Ratio (CRAR) stood at 23.27 per cent in the June 2021 quarter and it has a positive asset liability mismatch in all buckets—ranging from one month to 5 years.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , , ,
1 … 7 8 9 10 11 … 24