Public sector banks have raked in more profits in the three months ended June on the back of a persistent decline in bad loans and the trend may have a positive bearing on their balance sheets in the coming quarters. In the June quarter, Bank of Maharashtra (BoM) and State Bank of India (SBI) were in the lowest quartile as far as Gross Non Performing Assets (NPAs) and net NPAs were concerned, according to an analysis of the quarterly financial numbers published by the public sector lenders. Cumulatively, all the 12 public sector banks reported a profit of about Rs 15,306 crore in the three months ended June, registering an annual growth of 9.2 per cent. However, leading public sector lenders -- SBI and PNB -- posted lower profits in the June quarter.
Reserve Bank of India Deputy Governor Viral V Acharya further said that the impact of the notes ban would only be temporary and would help in bringing informal sector into the mainstream economy.
Fitch Ratings on Wednesday cut India's growth forecast to 10 per cent for the current fiscal, from 12.8 per cent estimated earlier, due to slowing recovery post second wave of COVID-19, and said rapid vaccination could support a sustainable revival in business and consumer confidence. In a report, the global rating agency said the challenges for banking sector posed by the coronavirus pandemic have increased due to a virulent second wave in the first quarter of the financial year ending March 2022 (FY22). "Fitch Ratings revised down India's real GDP for FY22 by 280bp to 10 per cent, underlining our belief that renewed restrictions have slowed recovery efforts and left banks with a moderately worse outlook for business and revenue generation in FY22," it said. Fitch believes that rapid vaccination could support a sustainable revival in business and consumer confidence; however, without it, economic recovery would remain vulnerable to further waves and lockdowns.
The government plans to bring down its stake to 26 per cent in these two banks, which are yet to be identified. This may not come in the way of getting investors for these banks, provided the government is willing to step back rather than run them the way it had been doing for over five decades since these banks were nationalised, points out Tamal Bandyopadhyay.
Banks recovered Rs 18,933 crore (Rs 189.33 billion) worth of bad loans during the April-December period.
'Large-caps are better placed to withstand the impact of higher input cost inflation, rising rates and withdrawal of excess global liquidity.'
'People trust India and Indians a lot more than they trust China and the Chinese.'
Lending rates in certain segments may be increased; fixed depositors may lock into existing rates.
Though Indian banks don't have large exposure to subprime mortgages, analysts are worried at the rise in their restructured loan portfolios and deterioration in credit quality.
Rating agency Moody's on Tuesday cautioned that a third front government created by regional parties could lead to capital flight and delay economic recovery.
Reserve Bank has almost finalised the structure of Central Fraud Registry.
Even if the bull run may continue, most experts say some profit booking is called for, points out Sanjay Kumar Singh.
'For the next two years, we expect the bulk of earnings growth contribution from sectors like financials and energy, where the outlook remains positive, while the sectors which are linked to domestic consumption and are currently witnessing strains on margins have low salience for Nifty earnings.'
The coming years could be exciting for Bandhan Bank, IDBI Bank, IDFC First Bank, Federal Bank, and CSB Bank.
'Funds based on this theme offer socially conscious investors an option to invest in a portfolio that is aligned to their beliefs.'
'We suggest investors with suitable risk appetite to consider allocating 40-50 per cent in large-caps, 25-30 per cent of funds in quality mid and small-caps and the rest in debt and high yield products.'
'A democracy cannot mean the rule of just two people,' said one audience member, who recalled that he too had chanted 'Modi, Modi' when the PM had visited the USA. Many of those gathered admitted to having been Modi supporters. What had changed them was the growing concentration of power. Jyoti Punwani reports from New York.
Delhi Capitals are looking like an outfit that is bereft of a Plan B as it became apparent in their 50-run thrashing at the hands of Lucknow Super Giants.
The gross NPAs of some public sector banks, including State Bank of India and Punjab National Bank have crossed 4 per cent of the total assets at the end of March, 2013.
Country's biggest lender State Bank of India had proposed merger of five associate banks.
As and when the equity markets run up substantially, book profits in your equity holdings and move this money towards debt instruments
It has been a year since the Reserve Bank of India (RBI) initiated prompt corrective action (PCA), an exercise that puts weak banks under central bank scrutiny, against the 94-year-old Lakshmi Vilas Bank (LVB). But recently, this low-profile Chennai-headquartered bank found itself attracting some unwonted publicity when 60 per cent of its shareholders voted against a proposal to re-appoint seven directors, including one of the promoters, K R Pradeep (who holds around 2 per cent), and the company's managing director & chief executive officer S Sundar.
Global private equity major KKR has ranked India second among the emerging markets on external risks, citing the high fiscal and current account deficits.
The incoming government will have to encourage private investments, bring down cost of capital
If you want his advice on your mutual fund investments, please mail your questions to getahead@rediff.co.in with the subject line, 'Mutual Fund Query', along with your name, and Omkeshwar will offer his unbiased views.
A roadmap for the consolidation of public sector banks will be outlined during the year.
The speed at which he led the central bank in different areas -- ranging from internal reorganisation to inflation fighting, stabilising the currency, taking on rogue corporations, cleaning up bank balance sheets, and opening the sector -- makes one believe that Rajan knew he had only three years to do his job. A fascinating excerpt from Tamal Bandyopadhyay's MUST-READ Roller Coaster: An Affair with Banking.
With the rise in interest rates, bond yields have been on the rise; this will dent banks' treasury profits. Also, many retail borrowers may find it difficult to service their loans when the loan rates rise, points out Tamal Bandyopadhyay.
Ulhas Joshi, Head -- Sales, Rank MF, a mutual fund investment platform, answers your queries.
Industry body Association of Mutual Funds in India on Friday assured investors that a majority of fixed income mutual funds assets are invested in superior credit quality securities and such schemes have appropriate liquidity to ensure normal operations. The statement by the industry body came after Franklin Templeton Mutual Fund voluntarily decided to wind up its six debt schemes citing redemption pressure and lack of liquidity in bond markets due to the coronavirus pandemic.
Private lenders have also been expanding their branch and automate teller machine networks aggressively.
Team India is all set to take on Australia in the final of the ICC World Test Championship final from Wednesday at The Oval and this 'Ultimate Test' also brings with it a set of milestones that players can establish during the course of the match.
The central bank will come out with fresh set of guidelines for companies applying for on-tap bank licence
The event will also hurt PNB's asset quality in the March 2018 quarter. While the finer details of the fraud have not been provided, making it difficult to gauge the exact impact, analysts say it will dent the bank's financials.
Kapoor was among the founding team of Yes Bank, along with Ashok Kapur who died in 2008.
'There will be political opposition, and this monetisation will require continued political will.'
'Just because you don't see them does not mean they don't exist.' 'The greatest risk is overconfidence.
The meeting with the top officials of public sector banks is scheduled for March 5, a senior finance ministry official told PTI.
S&P Global Ratings on Wednesday said Indian banks face a systemic risk as the second COVID wave will impair the performance of financial institutions in the April-September period. Stating that economic recovery remains highly vulnerable to setbacks due to COVID, particularly if fresh outbreaks trigger new lockdowns, S&P said the banking sector's weak loans will likely remain elevated at 11-12 per cent of gross loans in the next 12 to 18 months. "The second wave has front-ended weakness in asset quality," said S&P Global Ratings Credit Analyst Deepali Seth Chhabria. "Financial institutions face a strained first half amid weak collections and poor disbursements."
Neelesh Surana, who manages Mirae Asset Tax Saver and Mirae Asset Emerging Bluechip, remains constructive on Indian equities from a three to five-year time frame.
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