Reserve Bank of India – Press Releases
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Ajit Prasad Press Release: 2021-2022/1128 |
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Aditya Birla Capital posts its highest quarterly profit of Rs 377cr in Jul-Sep, BFSI News, ET BFSI
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New Delhi, Aditya Birla Capital on Monday reported its highest ever quarterly profit of Rs 377 crore on a consolidated basis in July-September 2021 on the back of strong growth across its business verticals. The company had posted a consolidated net profit of Rs 264 crore in the same period a year ago.
The consolidated profit after tax (after minority interest) grew 43 per cent year-on-year, to Rs 377 crore, the highest level ever recorded by the company, Aditya Birla Capital Ltd (ABCL) said in a release.
The consolidated revenue of the company grew by 22 per cent to Rs 5,961 crore during the July-September period of 2021-22, as against Rs 4,885 crore in the same period of 2020-21.
The active customer base grew to about 28 million (2.8 crore), a 42 per cent year on year growth. “The company’s focus on building scale, growing its retail base and delivering consistent profitability, continues to yield results,” it said.
The overall asset under management (AUM) across asset management, life insurance and health insurance businesses grew by 24 per cent from a year ago to over Rs 3,70,290 crore as of September 30, 2021.
The gross premium across life and health insurance during April-September FY22 grew by 25 per cent y-o-y to Rs 5,685 crore, reflecting the scale in insurance businesses, it added.
The overall lending book of NBFC and housing finance at Rs 59,060 crore shows the scale of the lending businesses, ABCL said.
The company said it has raised over Rs 6,000 crore of long-term funds in the lending business in the first half of FY2021-22.
ABCL shares traded at Rs 98.85 apiece on BSE, up 2.17 per cent from the previous close.
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GST surges to Rs 1.30 lakh cr in Oct; second highest collection since launch, BFSI News, ET BFSI
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New Delhi, India’s Goods and Services Tax (GST) collection surged to Rs 1.30 lakh crore in October, the second highest since its implementation in July 2017, indicating economic recovery from the COVID-19 pandemic and impact of festive demand, a finance ministry statement said on Monday.
The highest GST collection of Rs 1.41 lakh crore was recorded in April 2021.
This is the fourth time in a row when the GST collection was upwards of Rs 1 lakh crore. The collection from GST was Rs 1.17 lakh crore in September, 2021.
Tax collections last month on goods sold and services rendered was 24 per cent higher than in October 2020, and up 36 per cent over 2019-20.
“The gross GST revenue collected in the month of October 2021 is Rs 1,30,127 crore of which CGST is Rs 23,861 crore, SGST is Rs 30,421 crore, IGST is Rs 67,361 crore (including Rs 32,998 crore collected on import of goods) and Cess is Rs 8,484 crore (including Rs 699 crore collected on import of goods),” the statement said.
CGST refers to Central Goods and Services Tax, SGST (State Goods and Service Tax) and IGST (Integrated Goods and Services Tax).
The increase is very much in line with the trend in economic recovery and this is also evident from the trend in the e-way bills generated every month since the second wave.
The revenues would have still been higher if the sales of cars and other products had not been affected on account of disruption in supply of semiconductors, it added.
During October, revenues from import of goods were 39 per cent higher and the revenues from domestic transactions (including import of services) were 19 per cent higher than the revenues from these sources during the same month last year.
The statement further stated that the revenues have also been aided due to the efforts of the State and Central tax administration resulting in increased compliance over previous months.
In addition, it said, the action against individual tax evaders is a result of the multipronged approach followed by the GST Council.
On one hand, it said, various measures have been taken to ease compliance like nil filing through SMS, enabling Quarterly Return Monthly Payment (QRMP) system and auto-population of return.
On the other hand, the Council has also taken various steps to discourage non-compliant behaviour, like blocking of e-way bills for non-filing of returns, system-based suspension of registration of taxpayers who have failed to file six returns in a row and blocking of credit for return defaulters.
During the past one year, it said, GSTN has augmented the system capacity considerably to improve user experience.
With more and more taxpayers filing the returns every month, the percentage of returns of the old period filed in any month has been increasing continuously.
“With improvement of return filing, the focus of the GST Council has been on timely filing of GSTR-1, the statement containing details of invoices. This statement is critical to ensure discipline in taking input tax credit. Various steps have been taken to ensure timely filing of GSTR-1,” it said.
Overall, the impact of various efforts taken by the government has ensured increased compliance and higher revenues, the statement noted.
As a part of overall efforts to plug evasion, more steps to restrict fake ITC are under consideration of the GST Council.
The government has settled Rs 27,310 crore to CGST and Rs 22,394 crore to SGST from IGST as regular settlement, it said, adding, the total revenue of Centre and the States after regular settlements in the month of October 2021 is Rs 51,171 crore for CGST and Rs 52,815 crore for the SGST.
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Former SBI Chairman Pratip Chaudhuri arrested in loan scam case
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Former State Bank of India Chairman Pratip Chaudhuri was arrested on Sunday from his Delhi home in a case related to a hotel group in Jaisalmer.
The case is related to a hotel property owned by Godawan group that SBI seized after it was declared as a nonperforming asset (NPA). It is learnt that the loan amount involved in 2008 was ₹24 crore.
It maybe recalled that Chaudhuri had assumed charge as SBI Chairman on April 7, 2011 and retired on September 30, 2013.
Chaudhuri was arrested by Jaisalmer police on Sunday on the basis of arrest orders issued by the Chief Judicial Magistrate Court at Jaisalmer. The hotel property of Godawan Group was seized in lieu of the loan extended by SBI. Pratip Chaudhuri was the Chairman of SBI at that time when the property was seized.
With SBI selling the confiscated property in 2016 to Alchemist ARC, an asset reconstruction company, the hotel group went to court claiming that the bank transferred the property to ARC at much lower rate than the then prevailing market rate.
Interestingly, Chaudhuri had after retirement joined the Alchemist ARC company as director.
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Banks attract more home loan customers during this festival season
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Banks seem to be showing a distinct preference for growing their home loans within retail loans during the ongoing festive season, going by the recent interest rate cuts effected by them.
Most of the banks have announced reduction in home loans interest rates, which are now at an all time low, but interest rates on other loans such as vehicle loans and unsecured personal loans have been left more or less unchanged.
Among the banks that have announced home loan rate cuts during the ongoing festive season include Kotak Mahindra Bank (from 6.65 per cent to 6.50 per cent), State Bank of India (from 6.80 per cent to 6.70 per cent), Bank of Baroda (from 6.75 per cent to 6.50 per cent), Punjab National Bank (from 7.10 per cent to 6.60 per cent on home loans above ₹50 lakh), and Union Bank of India (from 6.80 per cent to 6.40 per cent).
Depending on a prospective borrower’s credit score, the banks would add credit spread to the aforementioned rates.
This cut in home loan rates comes even as industry experts believe there could be a dampening effect on the demand for cars (and in turn for loans to buy them) due to manufacturers passing on increase in raw material prices to customers in the last few months and rising fuel prices.
Also read: Healthy growth in home loans, may consider extending festive offer: Kotak Mahindra Bank
Bankers are also wary of the possibility of stress building up in the unsecured personal loans portfolio.
Further, banks no longer enjoy the advantage they had over gold loan companies (GLCs) last year (between August 6, 2020 and March-end 2021), when the Reserve Bank of India (RBI) allowed the former to offer loans for up to 90 per cent of the value of gold ornaments and jewellery to mitigate the economic impact of the Covid-19 pandemic on households, entrepreneurs and small businesses.
Now, with a level playing field having been created (both banks and GLCs can offer loans up to 75 per cent of the value of gold ornaments and jewellery), nifty GLCs can attract the customers they lost to banks during the aforementioned period.
Low risks
Banks consider housing loans as the best bet to grow their retail loan portfolio due to the relatively low risk of default, lower risk weights (whereby the minimum capital that needs to be set aside to mitigate default risk has been brought down up to March 31, 2022) and availability of strong collateral, according to banking expert V Viswanathan.
As per the monetary policy report, in respect of fresh rupee loans linked to the policy repo rate, the spread – weighted average lending rate (WALR) over the repo rate – charged by domestic banks during August 2021 was the lowest in the case of housing loans and the highest in the case of other personal loans, in line with their risk profiles.
In the case of home loans linked to external benchmark, the spread of WALR over the repo rate during August 2021 was 3.19 per cent for domestic banks. The aforementioned spread in the case of vehicle loans and other personal loans was at 3.60 per cent and 4.98 per cent, respectively.
Repo rate is the interest rate at which banks draw funds from RBI to overcome short-term liquidity mismatches. Currently, this rate is at 4 per cent.
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2 Banking And Financial Services Stocks To Buy For Good Gains
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Buy SBI Life Insurance
The firm has set a price target of Rs 1,500 on the stock of SBI Life Insurance as against the current market price of Rs 1,155.
SBI Life Insurance reported a strong 2QFY22, with APE growth of 46% YoY (5% beat) and VNB growth at a stellar 91% YoY (10% beat). VNB margin improved to 25.9% (up 560bp YoY). However, shareholders’ PAT declined by 18% YoY on account of higher claims settled in 2QFY22.
“Persistency has improved across cohorts on a YoY basis, with 13th/49th month persistency improving by 180bp/300bp YoY to 87.7%/69.3% and steady trends in the 61st month to 60.7%,” the brokerage has said.
“SBI Life Insurance continues to maintain its cost leadership, while persistency trends have improved on a YoY basis. We estimate APE growth at 23% CAGR over FY21-24E. VNB margin is estimated to reach 26.2% by FY24E, thus enabling 28% VNB CAGR and 18% EV CAGR over FY21-24E. We maintain our Buy rating with a revised target price of Rs 1,500 per share (2.7x Sep’23E EV),” the brokerage has said.
Buy IndusInd Bank
Motilal Oswal has set a price target of Rs 1,400 on the stock of IndusInd Bank. Loan growth picked up sharply, led by Corporate and MFI/Credit Cards, while the Vehicle book remains muted. Retail disbursements have crossed pre-COVID levels across most segments. Deposit trends continue to remain strong, led by Retail term deposits.
“IndusInd Bank reported an in line operating performance, with loan growth witnessing traction, while its liability franchise continues to improve, driving a consistent reduction in funding cost.
“We expect IndusInd Bank to deliver a FY23E RoA/RoE of 1.8%/15.1%. We roll forward our estimates to Sep’23E and maintain our Buy rating with a target price of Rs 1,400 per share (1.9x 1HFY24E ABV),” the brokerage has said.
Disclaimer
The above stocks are picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
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Reserve Bank of India – Press Releases
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HDFC Q2 net profit up 32%
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Housing Development Finance Corporation (HDFC) Ltd reported a 31.7 per cent jump in its standalone net profit for the second quarter of the fiscal at ₹3,780.5. Its net profit was ₹2,870.12 crore in the corresponding quarter last fiscal.
The net interest income for the half year ended September 30, 2021 stood at ₹8,255 crore compared to ₹7,039 crore in the previous year, representing a growth of 17 per cent.
The reported Net Interest Margin was 3.6 per cent.
“The demand for home loans continues to remain strong. Growth in home loans was seen in both the affordable housing segment as well as in high end properties. The increasing sales momentum and new project launches augurs well for the housing sector,” HDFC said in a statement on Monday.
During the half-year ended September 30, 2021, individual approvals and disbursements grew by 67 per cent and 80 per cent respectively compared to the corresponding period in the previous yea
Individual disbursements in the month of October 21 were the highest ever in a non-quarter end month, it further said.
The collection efficiency for individual loans on a cumulative basis improved to stand at over 98 per cent during the quarter ended September 30, 2021.
The provisions as at September 30, 2021 stood at ₹13,340 crore
As per regulatory norms, the gross non-performing loans as at September 30, 2021 stood at ₹10,341 crore. This is equivalent to 2 per cent of the loan portfolio compared to 2.24 per cent as on June 30, 2021.
As at September 30, 2021, loans restructured under the RBI’s Resolution Framework for Covid-19 Related Stress (OTR 1 & 2.0) was equivalent to 1.4 per cent of the loan book (as at June 30, 2021: 0.9 per cent of the loan book). Of the loans restructured, 63 per cent are individual loans and 37 per cent are non-individual loans. Of the total restructured loans, 35% is in respect of just one account.
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Capital Small Finance Bank files DRHP papers with SEBI, BFSI News, ET BFSI
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Capital Small Finance Bankhas filed its Draft Red Herring Prospectus with market regulator Securities and Exchange Board of India. Edelweiss Financial Services Limited, Axis Capital Limited and SBI Capital Markets Limited will be the book running lead managers of the issue.
The company plans to raise its initial public offering via a fresh issue of equity shares aggregating up to Rs. 450 crores and an offer for sale of up to 3,840,087 equity shares.
The offer for sale comprises up to 337,396 equity shares by PI Ventures LLP, 604,614 equity shares by Amicus Capital Private Equity I LLP, 70,178 equity shares by Amicus Capital Partners India Fund I and 836,728 equity shares by Oman India Joint Investment Fund II and up to 1,991,171 equity shares by certain person listed in DRHP.
The company has a good asset quality, with a GNPA of 2.08% and NNPA of 1.13%, lowest among its peers. They propose to utilise net proceeds from the fresh issue towards augmentation of the bank’s tier-I capital base to meet future capital requirements.
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Reserve Bank of India – Press Releases
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