Tag: covid

Nigeria gets $400 million in World Bank financing for COVID-19, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


LAGOS – Nigeria got approval on Friday for $400 million in World Bank financing to procure and deploy COVID-19 vaccinations, the bank said in a statement.

The World Bank board of directors signed off on the financing, provided via the International Development Association, which it said would enable Africa’s most populous nation to purchase COVID-19 vaccines for 40 million people, some 18% of its population, and support vaccine deployment to 110 million people.

In a statement, the bank said the money would ensure that the government can vaccinate 51% of its population within two years and “avoid the dreadful consequences of another lockdown that left in its wake an economic toll the country is still grappling with.”

The government last month said that around 20% of workers in Nigeria had lost their jobs as a result of COVID-19.

Nigeria has administered some five million vaccine doses to its 200 million citizens, and is in the midst of deploying millions more doses of Moderna and AstraZeneca shots received through the COVAX scheme aimed at providing vaccines to developing countries.

It also has 1.12 million doses of the Johnson & Johnson vaccine that it purchased through an African Union programme and is also scheduled to receive 7.7 million doses of the Sinopharm vaccine via COVAX.

As of Oct. 1, Nigeria had recorded 205,779 confirmed cases of COVID-19 and 2,721 deaths from the virus.

(Reporting By Libby George in Lagos and Camillus Eboh in Abuja, Editing by Nick Zieminski)



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Home loans set for a big boost this festive season, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Home loans are set to get a boost this festive season as easing Covid curbs give buyers confidence and rates stay rock bottom due to ample liquidity

Buyers confident about the economy are set to cash in on low rates to buy homes.

Housing sales have jumped over two-fold during the July-September period at 62,800 units across seven major cities on better demand driven by low mortgage rates and hiring in IT/ITeS sector, according to property consultant Anarock.

Sales of residential properties stood at 29,520 units in the year-ago period and 24,560 units in the previous quarter.

Housing prices appreciated by 3 per cent across the seven cities to Rs 5,760 per square feet in Q3 of 2021 calendar year from Rs 5,600 per square feet in Q3, 2020.

The ongoing WFH (Work For Home) culture continues to influence residential sentiment on two major fronts – overall housing demand and unit sizes.

About 80 per cent of respondents to a survey by consultant JLL expected to make a purchase in the next three months.

Fierce competition

Competition among lenders in the home loan space is also set to boost home loans.

Kotak Mahindra Bank is offering home loans at a lower rate of 6.50 per cent is a festive period offer available only for two months till November 8, and the lowest offering is for those having the highest credit scores coming from the salaried segment.

In the past, its rivals which include HDFC and SBI, have responded to rate cuts by slashing their own offering. The rate cut comes at a time when demand for home loans is falling in the country and may spark similar offers from rivals.

Large banks like the State Bank of India already offer home loans at as low as 6.65 per cent and 6.75 per cent, respectively, while the interest rates for HFCs is between 7.45 per cent and 10 per cent.

Nirmal Bang Institutional Equities said in a note, “The demand momentum seen in housing loans last year has tapered off and organic growth for the housing finance industry has been softening,” the brokerage house said. The organic growth in the home loan segment for large banks has been slowing over the last 45-50 days.

Home loan AUM growth

Even as lenders jostle for home loan pie, the assets under management of the segment across banks and non-banks are likely to grow by 15% over the next three to five years, according to ICICI Securities.

This would be on the back of the rise in disbursements and improved affordability.

“Factors such as low interest rates, stamp duty cut, benign real estate prices, etc. have improved affordability to own a house. ‘Work from home’ has kindled incremental housing demand. Construction too was not adversely impacted during the second wave,” the brokerage said.

Home loan growth fell to 8% over the previous three financial years as compared to 17-18% earlier while disbursements fell to Rs 5.3-5.5 lakh crore due to the pandemic. However, it has now risen to a run-rate of Rs 7-8 lakh crore.



[ad_2]

CLICK HERE TO APPLY

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

Soiled notes taking more space than usable ones, banks tell RBI, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Banks have conveyed to the Reserve Bank of India (RBI) that soiled notes are occupying more space in chests than the issuable currency, seeking an urgent intervention. Even as overall cash in the system has gone up, soiled notes are occupying more space, a senior bank executive said, suggesting an increase the chest cash holding limits till the soiled currency notes are lifted.

“RBI can take a policy decision for increasing the cash holding limits of currency chests if the soiled currency notes exceed a certain percentage, say, 60% of chest space,” the banker said.

RBI regional offices can hand out approvals for increasing the cash holding limits, the person said. The central bank has embarked on a ‘clean note policy’, which includes retrieval and processing of banknotes received from currency chests and destruction of soiled banknotes in an automated manner.

According to the RBI annual report, there was a higher than average rise in banknotes in circulation in 2020-21 primarily due to precautionary holding of cash by the public due to the Covid-19 pandemic.

The value and volume of banknotes in circulation increased by 16.8% and 7.2%, respectively, during 2020-21, as per the report. In value terms, the share of Rs 500 and Rs 2,000 banknotes together accounted for 85.7% of the total value of banknotes in circulation as on March 31, 2021, against 83.4% a year earlier. The report further said the pandemic also affected disposal of soiled banknotes although it was expedited during the latter part of 2020-21.

“Despite efforts, the year as a whole still witnessed a 32% decline in the disposal of soiled banknotes as compared to the previous year,” the report noted. At present, there are 3,054 currency chests of which 55% are with the State Bank of India (SBI).

“We anticipate that as the informal economy gathers pace as the country emerges from the shadow of the Covid-19 pandemic, there will be a greater demand for currency notes,” a second bank executive said.

Some industry participants suggest that the central bank should comprehensively update its currency chest policy. “They should allow private third party non-banking entities to operate currency chests for greater cost efficiency,” said Rituraj Sinha, group MD at private security firm SIS India.

RBI is in the process of introducing varnished banknotes in Rs 100 denomination on a field trial basis with a view to elongate the life of the banknotes.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

HDFC, Axis Bank and Yes Bank lead as corporates return to offices from WFH, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Financial organisations, including banks, fintech firms and NBFCs, are leading the return to offices from a long bout of work from home due to the pandemic.

HDFC, Axis Bank and Yes Bank are among the top corporates getting ready to reopen their offices as Covid wave ebbs amid the rise in vaccinations.

While some of the corporates have started operations at pre-Covid levels, others are seeking to get more employees to office.

What banks are doing

In line with the directives issued by governments, HDFC has 100% manpower at offices, while expectant mothers, female employees with children below 1 year of age, employees above 65 years of age, employees with co-morbidities and employees coming from any containment zones as defined by the authorities continue to work from home.

Kotak Mahindra Bank expects that 90% of the employees, who are fully vaccinated, will be back to office by November/December.

In branches and other customer-facing roles, it is close to reaching 100% levels.

At Yes Bank, around 40% of employees at our corporate office and other large offices work in hybrid models. The bank has a ‘Work from Anywhere policy’ in place to enable identified employees to work from alternative locations, in addition to working from their designated workplace.

Global scenario

A recent poll of leading U.S. and European banks found that while there would be a sharp decline in employees working five days a week in the office, the largest group still wants to work there four days. This data turns the consensus on its head, since bank managers are planning for more remote working than employees are demanding.

This view emerged this summer from an Infosys poll of 520 managers and employees at top U.S. and European banks. Seventy-one percent said they worked five days a week from the office pre-pandemic. Now, just 27% say they want that same schedule post-pandemic, although few want to be fully remote.

The largest group of bank employees (36%) say they want to work only one day remotely and the rest in the office. But fewer than half of managers (15%) anticipate that employees will seek this schedule. Also, managers consistently overestimated the number of workers who want to be in the office from one to three days a week.

As early as last September, JPMorgan CEO Jamie Dimon required traders to come back into the office, saying that remote working has slowed decision-making, hampered apprenticeships and reduced spontaneous learning and creativity. Goldman Sachs CEO David Solomon called remote working an aberration that was “not a new normal.”



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Private firms’ bank deposits log 26.5% growth during pandemic, households lag, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


In FY21, deposits from private sector companies grew by 26.5%, the biggest jump in nine years, even as the share of household bank deposits declined.

The share of private sector companies in total outstanding bank deposits increasing from 11.3% in FY20 to 12.7% in FY21, according to a report by Kotak Institutional Equities. The growth here has been faster than that of deposits from households, which grew by 12.9% during the year. The ratio of household (bank) deposits to GDP declined to 3 per cent in the third quarter from 7.7 per cent in July-September.

The data shows that the pandemic was not hard on private firms but households suffered.

“The slower growth in retail deposits and solid growth in the private corporate sector gives two opposing signals of the current economic condition. The private sector has accelerated deposit growth for the third consecutive year, giving further evidence that the impact of the pandemic was not negative,” the Kotak report noted.

Households hit

The first wave of Covid last year impacted households as their financial savings moderated to 8.2 per cent of GDP in the December quarter from 10.4 per cent in the previous three-month period, according to RBI data.

The preliminary estimate of household financial savings is placed at 8.2 per cent of GDP in October-December 2020-21, exhibiting a sequential moderation for the second consecutive quarter after having spiked in the pandemic-hit June quarter, RBI said in a release.

“The moderation was driven by a significant weakening in the flow of household financial assets, which more than offset the moderation in the flow of household financial liabilities,” it said.

Household debt to GDP

RBI further said household debt to GDP ratio, which is based on select financial instruments, has been increasing steadily since end-March 2019.

“It (household debt to GDP ratio) rose sharply to 37.9 per cent at end-December 2020 from 37.1 per cent at end-September 2020,” it said.

Despite higher borrowings from banks and housing finance companies, the flow in household financial liabilities was marginally lower in the third quarter following a marked decline in borrowings from non-banking financial companies.

As per the data, financial assets, including deposits, life insurance funds, provident and pension funds, currency, investments in mutual funds and equity, and small savings, stood at Rs 6,93,001.8 crore in the third quarter. It was at Rs 7,46,821.4 crore in July-September 2020-21.

Financial liabilities (loans) stood at Rs 2,48,418.7 crore in the third quarter. In the preceding quarter it was Rs 2,54,915.2 crore.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Securitisation pool collections improve as restrictions ease: Crisil Ratings

Banking & Finance

[ad_1]

Read More/Less


With the gradual phasing out of social restrictions, there has been an improvement in the monthly collection ratios of securitised pools rated by Crisil Ratings.

These had declined between April and June 2021 following the second wave of the Covid-19 pandemic.

“The trend in improving collection efficiencies has been seen across asset classes and in a number of segments, the levels are quite close to pre-pandemic levels. Collection ratios in mortgage-backed securitisation (MBS) pools have rebounded to near-100 per cent―their pre-pandemic normal ― in the pay-out months of July and August 2021,” Crisil Ratings said on Monday.

MBS pools, with home-or property-backed loans as underlying, have shown extremely high resilience across economic cycles.

Says Krishnan Sitaraman, Senior Director and Deputy Chief Ratings Officer, Crisil Ratings, “In asset-backed securitisation (ABS) pools, collection ratios are set to reach January-March 2021 pay-out levels after dipping to 84 per cent in the first quarter this fiscal.”

Median collection

Median collection ratios for vehicle loan pools for August pay-out reached 100 per cent, just a tad short of the March collection ratio of 101 per cent, he further said.

Similarly, in the case of two-wheelers and small and medium enterprise (SME) loan pools, collection ratios have risen to 98 per cent and 90 per cent in August from 95 per cent and 78 per cent respectively, for June pay-out.

“The government’s focus on rural areas and agriculture, and launch of schemes for SMEs have helped here,” Crisil said.

Rohit Inamdar, Senior Director, Crisil Ratings, said, “Securitisation volume after the second wave remains a pale shadow of what it was before the pandemic began. What’s encouraging, however, is the limited decline in collections after the second wave. The ongoing recovery should improve investor confidence and increase interest in securitisation transactions.”

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Fino Payments Bank to continue its focus on ‘emerging India’

Banking & Finance

[ad_1]

Read More/Less


IPO-bound Fino Payments Bank is betting big on technological innovation and customers beyond tier-2 towns to fuel its future growth.

“While innovation remains ever-present, technology and customer trust lies at the core of all that we do and forms the foundation for our entire business model. We have and will continue to strengthen our focus within ‘emerging India’, catering to a population that we believe presents a large market opportunity and has typically been overlooked by the majority of the large Indian financial institutions,” Fino Payments Bank has said in its draft red herring prospectus, adding that this section of society is often underserved and typically does not have access to basic banking services.

Training merchants

It has also said it plans to continue investing in technology throughout its business, particularly for on-boarding and training of merchants and will also enhance its ‘phygital’ delivery model.

As of March 31, 2021, Fino Payments Bank had 6.41 lakh merchants, 17,269 active BCs and 25.7 lakh CASA accounts. It also operates 54 branches and 143 customer service points.

The bank had filed draft documents with market regulator SEBI for an initial public offer in July this year. It is looking to raise about ₹1,300 crore, including a fresh issue of ₹300 crore as well as an offer for sale component

Since the beginning of the Covid-19 pandemic, the lender has also seen high levels of transactions through micro-ATM, AePS networks and BC banking operations also received an impetus with increased transactions.

Decline in domestic remittance

In its DRHP, the bank however, noted that there has been a significant decline in domestic remittance transactions as migrant workers relocated from urban areas to hometown. Although its remittance transactions have largely recovered since the initial outbreak and lockdown, it currently remains approximately six per cent below its typical domestic remittance throughput.

Its CMS temporary operations were also impacted due to moratoriums on lending and reduced cash handling requirements. But as the lockdowns eased, this has quickly returned to normal transaction levels.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

European banks book 20 billion euros, or 14% of their profits, in tax havens annually, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Europe’s biggest banks are booking an average of 20 billion euros ($23.7 billion) in tax havens every year, which is about 14% of their profits, according to a report by report from the EU Tax Observatory.

The report looked into the activities of 36 systemic European banks, headquartered in 11 countries across Europe, that have been subject to mandatory country-by-country reporting on their actions since 2015.

The tax havens looked into include Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Gibraltar, Hong Kong, Ireland, Isle of Man, Jersey, Kuwait, Luxembourg, Macao, Malta, Mauritius, Panama and Qatar.

About 25% of the banks’ profits were booked in countries where the effective tax rate was lower than 15%.

“Bank profitability in tax havens is abnormally high: 238,000 euros per employee, as opposed to around 65,000 euros in non-haven countries,” the authors added. “This suggests that the profits booked in tax havens are primarily shifted out of other countries where service production occurs.”

The profits

HSBC booked a mean 58% of its pre-tax profits in tax havens between 2014 and 2020, according to the study, making it the lender funneling the largest percentage of profits into the EUTO’s list of tax havens.

Standard Chartered booked an average of around a third of its pre-tax profits in tax havens, according to the report, while Deutsche Bank, Nord LB and RBS all booked, on average, more than 20% of their pre-tax profits in tax havens between 2014 and 2020.

Bankia BFA, Erste, Nykredit Realkredit, Swedbank and Banco Sabadell booked none of their profits in tax havens during the seven-year sample period.

Curbs needed

Taxes have become a sensitive issue, with cash-strapped governments plugging holes in the economy due to COVID seeking to agree on a common rate for taxing Big Tech, in particular.

Country-by-country reporting to shed light on the inner workings of banks has failed to change behaviour despite the rise of tax issues on the public agenda, the report said.

“More ambitious initiatives — such as a global minimum tax with a 25% rate — may be necessary to curb the use of tax havens by the banking sector.”



[ad_2]

CLICK HERE TO APPLY

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

Weathering challenges of 2nd Covid wave, microfinance industry grows in Q1FY22

Banking & Finance

[ad_1]

Read More/Less


The regional lockdowns across various parts of the country induced by the second wave of Covid notwithstanding, the microfinance industry witnessed a surge in disbursements in the April-June 2021 quarter.

Loan disbursals

Loan disbursals jumped to ₹25,503 crore during Q1FY-22 compared to ₹6,186 crore in the same period last year. The number of loans disbursed also increased to 71 lakh as against just around 21 lakh last year, MFIN (Microfinance Institutions Network) said in its latest issue of Micrometer report for April-June 2021.

As on June 30, 2021, the microfinance industry served 5.68 crore unique borrowers, through 10.30 crore loan accounts. The overall industry currently has a total gross loan portfolio (GLP) of ₹2,37,369 crore, an increase of over 4 per cent compared to ₹2,27,727 crores as on June 30, 2020.

Also read: Outlook for non-banks and housing financiers shifts to ‘improving’ from ‘stable’: Ind-Ra

According to Alok Misra, CEO and Director of MFIN, both loan portfolio and disbursements rose in Q1FY-22 on a Y-o-Y basis. The growth was however muted sequentially in comparison to Q4FY-21.

“This growth, despite difficult operating environment due to second wave of Covid-19, shows the ability of the industry to learn quickly and adapt to challenges. The Credit Guarantee Scheme for microfinance institutions with focus on small and medium-sized MFIs would ensure growth of MFIs in the short term as fresh loans need to be disbursed using the funds received under this scheme. In the medium to long-term, the asset-class based regulations proposed in the RBI’s consultative document, expected soon, would provide the much-needed impetus to industry to transform for a better future, leveraging on the past experience,” Misra said.

Share of loan portfolio

Banks (numbering around 13) hold the largest share of the portfolio in micro-credit with a total loan outstanding of ₹1,02,405 crore, accounting for a little over 43 per cent of the total micro-credit universe.

NBFC-MFIs are the second largest provider of micro-credit with a loan amount outstanding of ₹75,021 crore, accounting for 32 per cent. NBFC-MFIs witnessed close to 7 per cent increase in loan outstanding on a year-on-year basis against ₹71,301 crore as on June 30, 2020. The GLP includes owned portfolio of ₹65,206 crore and managed portfolio of ₹11,031 crore. Loan amount of ₹6,511 crore was disbursed by NBFC-MFIs in Q1FY-22 through 17.97-lakh accounts compared to ₹561 crore disbursed during the same period last year through 1.99-lakh accounts.

Average loan amount disbursed per account during the quarter under review was ₹36,243, which is an increase of around 29 per cent compared to the same quarter last financial year.

Small finance banks have a total loan amount outstanding of ₹38,624 crore with a total share of around 16 per cent. NBFCs account for another 8 per cent, and other MFIs for around one per cent of the total microcredit portfolio.

In terms of regional distribution of GLP, East, North-east and South continue to account for 66 per cent of the total portfolio.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Sundaram Finance presents favourable near-term outlook amid caution

Banking & Finance

[ad_1]

Read More/Less


The adverse economic impact of the Covid second wave is expected to be limited to the first quarter of this fiscal, said S Viji, Chairman, Sundaram Finance.

“The tapering of the second wave coupled with aggressive vaccination drive has brightened the near-term prospects for the economy, with the adverse economic impact expected to be limited to the first quarter of FY22,” Viji said while addressing the 68th annual general meeting of the company virtually on Monday.

“The agricultural sector has turned buoyant with a near-normal monsoon, robust procurement by the government and improved Kharif sowing,” he added.

The re-establishment of GST collections to ₹1 lakh+ crore levels, increase in fertiliser sales, improved e-way bill activity, increase in power and fuel consumption, and growth in eight core industries all point to a sequential improvement in economic activity from the disruptions induced by the Covid second wave.

Also read: Sundaram Finance posts 16 per cent rise in Q1 net profit at ₹192 crore

However, the country’s ability to mobilise vaccines at scale, maintain the pace of vaccinations, and containment of the virus spread, especially as new variants emerge, will all be determinants of consumer confidence sustaining and consequently of economic recovery,” he said.

Festival season for auto

“While the automotive sector has been facing production constraints due to the global shortage of semiconductors, the recent pandemic-driven lockdowns in East Asia are compounding the challenge. This, coupled with higher input prices on fuel and commodities, presents the risk of a dampener to the upcoming festival season”, said Viji.

Focus areas

Given the level of uncertainty and volatility, Sundaram Finance to focus on striking a judicious balance between growth, quality and profitability (GQP), the time-tested trinity that has served the company well.

“Key priorities will be to support loyal customers tide over the aftermath of the Covid crisis by deploying all measures made available by the regulator and the government, drive collections and recovery efforts with a view to maintaining the traditional asset quality levels and preserving capital, and prudently pursuing growth opportunities that emerge as economic activity resumes post second wave across the well-understood and diversified asset class base that Sundaram Finance has established.” he stated.

Emerging growth areas

As the economic activity revives, the company expects the commercial vehicle segment to bounce back strongly. “In the CV space, in addition to growth in the M & HCV space, we believe that the SCV and ICV segments will continue to offer growth opportunities. In the passenger vehicle segment, we see a long run way as the consumer market matures and grows in India,” said Rajiv Lochan, Managing Director, Sundaram Finance.

The company also sees favourable growth opportunities in construction equipment and tractor segments due to heightened activities across infrastructure and the rural and agricultural sectors on the back of government push.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , , , , , ,
1 2 3 4 5 … 17