Tag: sbi

SBI announces various special offers for retail customers

Banking & Finance

[ad_1]

Read More/Less


The country’s largest lender State Bank of India on Monday announced a slew of offers for its retail customers ahead of the festive season.

The bank has announced a 100 per cent waiver on processing fees for its car loan customers across all channels, a release said, adding that customers can get the facility of up to 90 per cent on-road financing for their car loans.

The lender is also offering a special interest concession of 25 basis points (bps) to a customer applying for a car loan through YONO.

YONO (You Only Need One App) is the mobile banking app of the lender.

YONO users can avail car loans at an interest rate starting at 7.5 per cent per annum, the release said.

The bank is offering a reduction of 75 bps in the interest rates for customers availing gold loans. They can avail gold loans from across all channels of the bank at 7.5 per cent per annum.

Moreover, it has waived off the processing fee for all the customers applying for gold loans via YONO, the release said.

For personal and pension loan customers, the lender has announced a 100 per cent waiver in processing fees across all channels.

For Covid warriors i.e, frontline healthcare workers applying for personal loans, a special interest concession of 50 bps has been announced. This offer will soon be available for application under car and gold loans as well, it said.

The lender said it is introducing a ‘Platinum Term Deposits’ offer for its retail depositors, to mark 75 years of independence. Under the offer, customers can get additional interest benefits of up to 15 bps on term deposits for 75 days, 75 weeks, and 75 months tenors starting August 15, 2021 to September 14, 2021.

“We believe that these offerings will help customers to save more on their loans and at the same time add value to their festive celebrations,” the bank’s managing director CS Setty said in the release.

Last month, the bank had announced a 100 per cent waiver on processing fees on home loans till August 31, 2021. Its home loan interest rate starts at 6.70 per cent.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Bankers hopeful of a revival in corporate loan growth as economy opens up, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Bank credit to industry remains muted, falling 1.7% in the year to date, with companies slashing debt and harnessing existing capacities in a demand environment made uncertain by the pandemic. But bankers expect a revival in corporate loan growth as the economy opens up, making a strong business case for capital expenditure.

Chunky industrial loans, which make up about 30% of non-food credit, have witnessed lukewarm demand so far in 2021, latest central bank data showed, underscoring a trend among companies to conserve cash, deleverage as much as possible, and leave under-utilised the respective loan limits sanctioned by lenders. Retail credit demand has expanded, however, through the period of episodic lockdowns and curbs on mobility.

Both analysts and bankers believe credit demand will now pick up as companies invest for the next cycle of growth. In a report published earlier this month, Japanese investment bank Nomura said growing optimism and abundant liquidity should boost loan demand.

“Banks expect an across-the-board improvement in demand through Q1 2022, with optimism levels the highest for retail loans, followed by manufacturing and services, while infrastructure loan demand lags,” Nomura said. “The simultaneous rise in loan demand and easing of loan supply conditions suggest that credit growth should eventually pick up.”

An uncertain business environment led to muted credit demand from traditionally asset-heavy industries, such as industrial metals, metal products, iron and steel, construction and cement. Instead of adding more debt to their balance sheets, several companies in these sectors sought to deleverage, harnessing cash flows to improve their debt profiles.

Incidentally, better profiles should now encourage many companies to add debt as expansion capital.

“We believe India Inc, after undergoing a phase of deleveraging over the past few years, is now better positioned … (for) re-leveraging. Indian financiers, too, have saddled themselves with ample liquidity or capital buffers to tap the emerging opportunity,” ICICI Securities said in a note. “Recovery in economic activity and the derivative effect of increased investments and corporate/government spending on consumption will sustain the momentum of 15%-plus growth over FY22-FY25.”

To be sure, cheaper rates in the local and overseas bond markets meant that companies looked to those sources for their short- and medium-term funding needs instead of banks.

Bankers believe that as companies embark on large projects, loan demand will rebound. For instance, Bank of Baroda reported a year-on-year fall of 10% in corporate loans as it shed low-yielding advances in the first quarter. But CEO Sanjiv Chadha said he expects loan growth to pick up this year, helping the bank expand its loan book by 7% to 10%. That would include a 5% to 7% expansion in corporate loans.

“Retail loans will still grow faster than corporate loans but we are seeing an uptick in demand from road projects, city gas projects and renewable energy projects, which will help the demand for loans,” Chadha said during the bank’s first-quarter earnings call.

Retail loans have expanded 12% on-year, helped by a low base and paced by demand for homes and vehicles. Credit card spending fell.

Home loans expanded 10% and vehicle loans 11% despite the lockdowns through April and May. But outstanding credit card loans fell 12% year-on-year as consumer sentiment was hit by localised lockdowns.

State Bank of India (SBI), which reported a 2.3% fall in corporate loans, also expects the situation to improve this fiscal. Chairman Dinesh Khara said he expects demand from companies to improve, boosting its loan margins, as both individual and industrial borrowers add more loans.

To be sure, demand from industry is crucial to prop up overall credit growth.

“We believe industry growth will have to emerge as a key driver to boost credit growth in coming years. While it may happen with some lag, revival in consumer demand and rise in government spending can be the potential triggers,” ICICI Securities said.



[ad_2]

CLICK HERE TO APPLY

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

NCLT orders liquidation of Siva Industries, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


The National Company Law Tribunal (NCLT) Chennai has dismissed the C Sivasankaran application and ordered the liquidation of Siva Industries.

NCLT said that Sivasankaran application under section 12 (A) does not stand. NCLT has also dismissed the SBI application.

Siva Industries and Holdings Limited (Siva Industries) will go into liquidation after the NCLT rejected the application.

This is as per provisions of the Insolvency and Bankruptcy Code where 90 per cent of the lenders had not given approval.

Lenders of Siva Industries and Holdings Limited (Siva Industries), founded by C. Sivasankaran (the former promoter of Aircel) had filed application under Section 12A of Insolvency and Bankruptcy Code 2016 (IBC) in National Company Law Tribunal (NCLT), Chennai Bench for withdrawing the insolvency proceedings against Siva Industries.
Siva Industries and Holding owes Lenders approx Rs 5,000 crore.

The settlement

The lenders to Siva Industries had told the National Company Law Tribunal that they will get 26% of their dues after taking into account third-party guarantors. Operational creditors were to get part of their dues under the settlement plan.

The deal had raised eyebrows as such offers by promoters were rejected in the past.
On the reason why they approved the 12A petition of promoters banks had told the court that if a company is liquidated or in a resolution plan involving a third party, all operational creditors, including tax authorities, are wiped out.

Also, the IDBI Bank‘s claim of Rs 644 crore will be paid while Blackstone-backed International ARC will get an additional amount of Rs 510 crore via land sale, they had said.

Unusual deal

Bankruptcy experts had termed the settlement unusual, citing the rejection of such offers by promoters in the past.
The acceptance of Sivasankaran’s offer differed from the usual pattern of rejection by creditors of such deals proposed by promoters seeking to withdraw their companies from bankruptcy proceedings.

Atul Punj of Punj Lloyd, Videocon’s Venugopal Dhoot, Sanjay Singal of Bhushan Power and Steel, and the Ruias of Essar Steel had all made offers to creditors to persuade them to drop bankruptcy proceedings. All were rejected.
In DHFL’s case, the promoter Kapil Wadhawan had offered to repay the debt in full, but the lenders ruled in favour of Piramal.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Yes Bank seeks partners for asset recast company, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


MUMBAI: Yes Bank has invited bids from potential partners for a proposed asset reconstruction company that will undertake recovery of bad loans. Management consultancy firm Ernst & Young is assisting the bank in the process.

In an advertisement on Wednesday, the private bank invited applications from investors with assets under management of at least $5 billion and possessing substantial experience in the distressed asset space. According to bankers, given the $5-billion assets under management eligibility criteria, it will be largely global distressed asset funds that will qualify.

Yes Bank had collapsed under the weight of bad debts in March 2020 and was placed under a moratorium by the RBI. Although Yes Bank was part of a consortium of lenders in most of the default cases, it was the worst hit because its exposure was disproportionate to its size and the bank had a presence in almost every major stressed asset. It was reconstructed through a government-notified scheme with banks led by SBI bringing in significant capital.

Given the complexity of recovering from large defaulters, Yes Bank’s new management had pursued setting up an asset reconstruction company from the time it took over in early April 2020. Addressing analysts in a post-results call last week, the bank’s MD & CEO Prashant Kumar said that it had made a cash recovery of Rs 5,000 crore last year, and the recoveries were much more than the provisions.

“The kind of effort that the engagement with those NPA customers which we have made during the last year — and which continued — I think would give us much better recoveries during the current fiscal year, and our recoveries would also result in significant gain on the P&L and there would not be any need to make any additional provision for this,” said Kumar.

The bank had total gross non-performing exposures of Rs 38,821 crore at the end of June 2021 as against Rs 39,034 crore in the previous quarter. “On the recovery side, our specialised stressed asset management team of about 100 professionals have demonstrated a significant track record of cash recoveries. He added that the team is divided into two parts — core resolution & recovery team, and support function. “We expect to have cash recoveries of Rs 5,000 crore in the current financial year,” said Kumar.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

10 banks come together to set up Secondary Loan Market Association

Banking & Finance

[ad_1]

Read More/Less


Ten major banks, including State Bank of India (SBI), ICICI Bank, Canara Bank and Standard Chartered Bank (SCB), have come together to set up the Secondary Loan Market Association (SLMA). It is aimed at promoting the growth of the secondary market for loans in India and also create an online platform for this purpose.

SLMA is a self-regulatory body and has been formed as per the recommendation of the Reserve Bank of India’s Task Force on the Development of secondary market for corporate loans.

Wanted: A secondary market for bank loans

The other members of SLMA are Kotak Mahindra Bank, Deutsche Bank, Bank of Baroda, Punjab National Bank, Axis Bank and HDFC Bank.

As per SLMA’s memorandum of association, it will facilitate, promote and set up an online system for the standardisation and simplification of primary loan documentation, and standardisation of documentation for the purchase and sale/assignment documentation and other trading mechanisms for the secondary loan market and its documentation.

Website, logo, launched

SLMA will also develop and promote standard trading, settlement and valuation procedures and practices and rules and timelines for the members for conducting the business and to fix transaction-related charges.

The company’s website and logo were digitally launched on August 11, 2021, by Saurav Sinha, Executive Director, Reserve Bank of India.

Bonding together

Sinha said an active secondary market for loans in India will offer benefits to various stakeholders by way of capital optimisation, liquidity management, risk management, exposure re-balancing and efficient price discovery mechanism.

He observed that since smaller banks are generally constrained for various reasons from participating in large and creditworthy lending exposures at the time of origination, the secondary market can enable them to participate in such exposures at a later stage and the constraints faced under the Large Exposure Framework will be a thing of the past.

Sinha also laid stress on the essential pre-requisites for a vibrant secondary market — an ecosystem of market intermediaries like facility agents, security trustee, arrangers, valuation agencies, etc.

Expanding the spectrum of investors

Ashwini Bhatia, Managing Director, SBI, noted that the conceptualisation and operationalisation of SLMA in a time-bound manner is an appropriate response to the long-felt need for wider participation in the loan market aided by appropriate risk mitigation. It will provide the banks and other participants a window for managing their loan assets portfolio, he added.

Bhatia underscored that presently, the primary and secondary markets are restricted to banks and non-banking finance companies and domestic and foreign investors participate only in distressed debt through Asset Reconstruction Companies.

“As such, there is a felt need to expand the spectrum of investors in the secondary market and Alternative Investment Funds/Mutual funds to invest in the secondary loan market,”he said.

Sanjay Srivastava, Chairman, SLMA, said the secondary market for loans in India will evolve on the strength of a systematic digital loan trading platform, standardisation of documents, active participation by stakeholders and effective price discovery mechanism.

Sunil Mehta, Chief Executive, Indian Banks’ Association (IBA), said currently the IBA is actively working on development of syndicated loan market in India and one of the key success factors for such market will be the parallel development of secondary market for sale of loan.

[ad_2]

CLICK HERE TO APPLY

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

Blockbuster week with Rs 14,000 crore mop-up in IPOs, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Mumbai: The IPO frenzy on Dalal Street continued with four offers together this week trying to mobilise about 14,600 crore, making it one of the busiest weeks for IPOs in several years. The previous week saw 3,614 crore, while during the week of July 12-16, 9,375 crore was raised from just one IPO — Zomato, data from exchanges and merchant bankers showed.

The previous large week for an IPO mobilisation was March 2-6, 2020 when SBI Cards raised 10,355 crore. A combination of easy availability of funds globally, a stock market that is recording a new peak on a regular basis and strong listing gains have combined to prompt promoters, merchant bankers and private equity investors to take companies public, industry players said. During the current week, Nuvoco Vista Corp is raising 5,000 crore through its IPO, which is the first such offer from a cement company in the last one and half decades. Nuvoco Vista is majority owned by Karsanbhai Patel who is also the owner of Nirma detergent. Its aim to raise 5,000 crore would make it the second-biggest IPO this year after Zomato’s. The last IPO of a cement company was launched in 2006 when JK Cement went public.

Nuvoco Vista is the fifth largest cement company in India and the biggest in eastern India. The shares are being offered at a price band of 560-570 per share. The IPO will close on August 11. According to a report by IIFL Securities, “given NVCL’s size, strong brand ownership, leadership position in the fast-growing eastern Indian market, availability of limestone mines for future expansion, and scope for improving profitability & deleveraging balance sheet, we believe valuations are reasonable. We recommend subscribing to the IPO.” Along with Nuvoco, three other IPOs are also open now. The IPO for CarTrade is for a tech-enable auto listing company while for Chemplast Sanmar, a speciality chemical company, it’s the second coming to be publicly listed after being delisted about 10 years ago. The IPO for Aptus Value Housing is for a mortgage finance company serving mid- and low-income segments.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , ,

SBI, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


The State Bank of India on Tuesday said there’s a need to jump start domestic consumption for India to achieve sustained growth even as export growth shows a definitive uptick.

It said for the 18 year period ended FY21, the weighted contribution of exports was 28% and of consumption was 69% while for the seven-year period ended FY21, their weighted contributions were 7% and 71%, respectively.

“It has to be kept in mind that primary engine of growth for India remains domestic consumption and unless that improves it is difficult for India to achieve sustained growth,” said Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI.

Among export sectors, it said ships and boats, aircrafts and ceramics have potential and focus on these can yield positive result.

Led by engineering goods, petroleum products, gems & jewellery, textiles and garments and organic & inorganic chemicals, India’s merchandise exports in April-July were $130.53 billion, up 73.51% over $75.22 billion in the year ago period and up 21.82% over $107.15 billion in the same period in 2019-20.

As per the report, the biggest contribution to exports has been of petroleum products- 1.5% in FY97, 21% in FY14, 9% in FY21 and recovered to 14% in the current fiscal.

Stating that the impact of international crude oil prices has always been a big factor in the way India’s crude oil exports, SBI said as the world slowly moves towards cleaner sources of fuel, India needs to chart a plan to gradually bring its share down.

“This can only be possible if other manufactured exports improve,” the bank said.

While chemicals and pharmaceuticals, electrical and mechanical machinery and appliances, vehicles, articles of iron and steel, plastics have grown “fairly steadily” and increased their share in the overall exports, Ghosh said there is no big segment which has shown such growth as petroleum sector had done in the past.

Over the years, certain agri based and labour intensive products like residues and wastes from food industries, animal fodder, coffee, tea, mate and spices, carpets and footwear have exited the export list whereas aluminium and its articles, ships, boats and floating structures exports have grown rapidly and are now part of the top exports, according to the report.

Similarly, furskins and artificial fur, arms and ammunition, furniture, aircraft and space craft and zinc and its articles have shown rapid growth but their share in overall exports is still very low as they started from a very low base.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Public sector banks’ corporate loans decline in Q1 as Covid, competition hurt, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Lending to the corporate sector by public sector banks declined significantly in the first quarter as Covid kept the demand depressed and competition from private sector banks and the bond market rose.

The domestic corporate loans by the State Bank of India fell 2.23 per cent to Rs 7,90,494 crore in the quarter ended June 30, 2021, compared to Rs 8,09,322 crore in the same quarter last year. In the fi rst quarter of FY21, SBI reported 3.41 per cent growth in corporate advances.

Union Bank of India‘s share of industry exposure in domestic advances dropped to 38.12 per cent at Rs 2,40,237 crore from 39.4 per cent at Rs 2,47,986 crore in the same quarter a year ago. Corporate loans dropped 3% at Indian Bank during the last quarter. At PNB, corporate loans fell 0.57 per cent at Rs 3,264,66 crore in June quarter 2021 compared to

Rs 3,28,350 crore a year ago.

Up to May, the gross loans to large industries declined by 1.7 per cent year­-on­year, according to RBI data.

Ceding ground of private-sector rivals

The market share of public sector banks in loans declined to around 59 per cent (of all scheduled commercial banks’ outstanding credit) in December 2020 against around 65 per cent in December 2017.

However, during this period, PvSBs market share rose to around 36 per cent from around 30 per cent, going by Reserve Bank of India data.

Falling industrial credit

The share of banks in loans to the industrial sector dropped massively during 2014-2021 even as credit to the retail sector, including home loans, saw a boom.

As per the data, industrial credit fell to 28.9% by March 2021 from 42.7% at the end of March 2014.

“Over recent years, the share of the industrial sector in total bank credit has declined whereas that of personal loans has grown,” the Reserve Bank of India said in its Financial Stability Report.

The environment for bank credit remains lacklustre in the midst of the pandemic, with credit supply muted by persisting risk aversion and subdued loan demand and within this overall setting, underlying shifts are becoming more evident than before, it said.

Loans to the private corporate sector declined from 37.6% in 2014 to 27.7% at the end of March 2021. During the same period, personal loans grew from 16.2 to 26.3%, in which housing loans grew from 8.5% to 13.8%.

Fiscal 2021

Bank credit growth to the industrial sector decelerated 0.8% year-to-date as of May 21, 2021, due to poor loan offtake from the corporate sector.

Growth in credit to the private corporate sector, however, declined for the sixth successive quarter in the fourth quarter of the last fiscal and its share in total credit stood at 28.3 per cent. RBI said the weighted average lending rate (WALR) on outstanding credit has moderated by 91 basis points during 2020-21, including a decline of 21 basis points in Q4.

Overall credit growth in India slowed down in FY21 to 5.6 per cent from 6.4 per cent in FY20 as the economy was hit hard by Covid. and subsequent lockdowns.

Credit growth to the industrial sector remained in the negative territory during 2020-21, mainly due to the COVID-19 pandemic and resultant lockdowns. Industrial loan growth, on the other hand, remained negative during all quarters of 2020-21.”

The RBI further said working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit, contracted during 2020-21, indicating the impact of the coronavirus pandemic.

Shift to bonds

The corporate world focused on deleveraging high-cost loans through fundraising via bond issuances despite interest rates at an all-time low. This has led to muted credit growth for banks.

Corporates raised Rs 2.1 lakh crore in December quarter and Rs 3.1 lakh crore in the fourth quarter from the corporate bond markets. In contrast, the corresponding year-ago figures were Rs 1.5 lakh crore and Rs 1.9 lakh crore, respectively.

Bonds were mostly raised by top-rated companies at 150-200 basis points below bank loans. Most of the debt was raised by government companies as they have top-rated status.

For AAA-rated corporate bonds, the yield was 6.85 per cent in May 2020, which fell to 5.38 per cent in April 2021 and to 5.16 per cent in May 2021.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Bankers view on RBI’s policy, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Dinesh Khara, Chairman, SBI said, “The RBI policy is pragmatic and strikes a fine balance between stance and strategy. While the policy stance continues to be accommodative to continuously support growth, a strategy of careful recalibration of liquidity management is clearly indicated with the roll out of VRRR.

Dinesh Khara

The policy has also nudged banks to shift to an alternate reference rate with the discontinuation of LIBOR. The extension of the on-tap TLTRO scheme and the deferral of the deadline for meeting the operational parameters for stressed entities will help corporates navigate through the pandemic with a degree of certainty.”

Rajni Thakur, Chief Economist, RBL Bank said, “MPC announcements were pretty much on expected lines with key rates held constant and upward revision of inflation forecasts for the current fiscal year.

Policy bias in favour of nurturing growth continues and there was a strong denial of any urgency to scale back monetary support on account of higher inflation or potential global normalisation.

While enhanced VRRR quantum and one voice of dissent can be seen by market as mildly dovish, in all likelihood, RBI has kept its options open to support growth should the third wave disrupt nascent momentum or to use monetary tools to begin normalisation if growth -inflation dynamics start to get complicated.”

Rajni Thakur
Rajni Thakur

On similar lines, Siddhartha Sanyal, Chief Economist and Head – Research, Bandhan Bank said, “While the status quo on rates with a 6-0 voting and continued “accommodative” stance were on expected lines, the split voting as regards the policy stance was a modest surprise. Still, the overall tone of policy continued to focus clearly on supporting growth recovery.”

“Given higher global commodity prices, sticky food inflation and rise in domestic fuel prices, inflation may stay higher than for the RBI’s comfort. However, with the tentative and uneven nature of recovery, one expects the MPC to continue prioritizing supporting growth in the coming months.”

Sidharth Sanyal
Sidharth Sanyal

Indranil Pan, Chief Economist – YES BANK said, “RBI has attempted and managed to balance the contradicting objectives of managing inflation expectations while also communicating the need for sustained policy accommodation.

Even as the inflation forecasts for the current FY have been raised, the communication continues to be that the hump in inflation is supply-led and thus ‘transitory’ wherein the demand side push for inflation is almost absent. This is the reason for RBI to have been able to see-through the current high inflation levels.

RBI continues to highlight that any pre-emptive tightening can kill the nascent and hesitant recovery that is taking shape. In cognizance with an extremely uncertain growth climate, we think that the RBI will maintain its accommodative policy and not move on any form of tightening – be it on the rates side or on the liquidity side – till the end of the current FY.”

Yes Bank
Yes Bank

While A. K. Das, Managing Director & CEO, Bank of India has a positive outlook. He said, “Continued accommodative stance of RBI is expected to catalyze growth in real segments in a strong, broad based and sustained manner”.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , ,

As loan growth slows, other income comes to banks’ rescue, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Other income has come to the rescue for banks even as they grapple with weak loan growth, in the first quarter of the fiscal year, bank results show.

All banks have seen a year on year growth in other income led by fees and recovery in large written off accounts like the defunct Kingfisher Airlines as a result of which the contribution of other income to total income has increased.

The trend is the same for both large and small banks. For example, State Bank of India (SBI) reported a 24% rise other income to Rs 11,803 crore led by a 21% rise in fees and a Rs 1,692 crore recovery from the written off Kingfisher Airlines’ account which has increased the proportion of other income to 15% of total income from 11% last year.

The story is similar in the large private sector bank’s as well which traditional have a larger proportion of fee income. HDFC Bank‘s other income grew 54% led by fees and commission and income from foreign exchange and derivative transactions, increasing the share of other income to total revenues to 17% from 12% a year earlier. HDFC’s peer ICICI Bank also reported a 53% rise in other income led by fees despite a fall in treasury income.

Analysts say higher proportion of other income though legitimate is driven mostly by lumpy income streams which are not sustainable. However, they expect banking core incomes to rise as loan growth picks up later this year.

“Other income has increased through two main heads namely income from treasury and income from written off accounts. Both of these are very volatile and depend on market conditions and can be called one offs. Banks are sitting on excess SLR and have booked profits this quarter which is reflected in treasury gains. Having said that they are both legitimate income streams and there need not be a concern though for the quality of earnings to be sustainable revival of credit growth is important,” said Asutosh Mishra, head of research at Ashika Stock Broking.

Other income has risen for even smaller lenders as banks dug deep for new income streams faced with twin challenges of depressed loans demand and slow recovery of loans in light of the second wave of the pandemic.

RBL Bank’s other income doubled to Rs 695 crore led by a 137% growth in retail fee income even as total advances fell marginally to Rs 56,527 crore from Rs 56,683 crore a year earlier. Even public sector Bank of India reported a 39% rise in other income due to recovery from a written off aviation account and foreign exchange income even as loan book fell 0.18%.

“This quarter there also has been a increase in forex trading income as forward premiums came down during the quarter, allowing banks to book profits.
Along with the repricing the bond investments this has helped other income,” said Anil Gupta, vice president financial ratings at ICRA.

Gupta expects credit growth to revive later this fiscal as corporate working capital requirements will increase due to higher commodity prices. “We expect credit growth of 8% next fiscal which will bring higher core income and also fees so there is no reason to worry on the outlook,” he said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,
1 … 8 9 10 11 12 … 25