The country's largest lender SBI on Friday reported an 80 per cent surge in standalone net profit at Rs 6.450.75 crore for the fourth quarter ended March 2021, aided by decline in bad loans. State Bank of India (SBI) had registered a profit of Rs 3,580.81 crore during January-March period of 2019-20, the lender said in a regulatory filing. Total income of the bank during the March quarter of the last financial year rose to Rs 81,326.96 crore, from Rs 76,027.51 crore in the same period of 2019-20.
Banks' gross non-performing assets (NPAs) and net NPAs are expected to rise to 10.1-10.6 per cent and 3.1-3.2 per cent, respectively by March 2021, Icra said on Monday. The agency also expects net NPA to decline to 2.4-2.6 per cent by March 2022. "As moratorium on loan repayments is over and though we await the Honourable Supreme Court directive on asset classification, the GNPAs and NNPAs for banks are likely to rise in near term to 10.1-10.6 per cent and 3.1-3.2 per cent, respectively by March 2021 from 7.9 per cent and 2.2 per cent, respectively as of September 2020," the rating agency said in a report.
Relations with the government, the bank's majority owner, are a tricky issue for all SBI chiefs, and, like all his predecessors, Khara will be closely watched for his equations with the finance ministry representative on the SBI board.
You will come across many a hurdle while purchasing a used car. That, however, cannot keep you away from realising your dream.
Standard & Poor's on Wednesday lowered the stand-alone credit profile of two government-owned lenders- the State Bank of India and Union Bank of India citing concerns over their asset quality and high credit cost.
The Reserve Bank of India (RBI) has approved a three-member committee of directors to run the day-to-day functioning of cash-strapped Lakshmi Vilas Bank.
Banks' bad loans might cross Rs 10 lakh crore by the end of this fiscal, mainly on account of slippages in retail and MSME sectors, a study said on Tuesday. "NPAs are expected to rise to 8.5-9 per cent by March 2022, driven by slippages in retail, Micro, Small and Medium Enterprise (MSME) accounts, besides some restructured assets," the study by industry body Assocham and ratings firm Crisil said. The study titled 'Reinforcing the Code' said the Gross Non-Performing Assets (GNPAs) of banks are expected to cross Rs 10 lakh crore by March 2022.
'For equities, inflation trending upwards but within the range of expectations can actually be a big positive as it helps earnings and may shift flows from bonds to equities.'
Reserve Bank Governor Shaktikanta Das on Monday said despite the latest headwinds arising from the Jackson Hole summit leading to extreme volatility, our banking system and financial markets are strong enough to withstand such pressures. Taking the markets by surprise, US Fed chair Jerome Powell had told the annual Jackson Hole summit of central bankers and economists last week that he would have to keep raising federal fund rates to tame inflation, which remains the biggest challenge to the world's largest economy. He also warned of the pains that such monetary policy actions would create on growth and jobs.
'We are very watchful about inflation and growth. But the main challenge is economic revival and growth.'
IndusInd Bank was the top gainer in the Sensex pack, rallying over 7 per cent, followed by SBI, ICICI Bank, HDFC twins, Axis Bank, Bajaj Finserv and UltraTech Cement. NSE Nifty soared 245.35 points to 14,923.15.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
New norms are in place to strengthen regulations for this set of lenders which has been playing a critical role in Asia's third largest economy, notes Tamal Bandyopadhyay.
The Reserve Bank on Monday asked all banks and financial institutions to assess the impact on their balance sheet, asset quality, liquidity, among others, in the wake of the potential threat arising out of the spread of coronavirus disease in India. Several confirmed cases have also been detected in India, which highlight the need of a co-ordinated strategy for handling the emerging situations to protect the resilience of the Indian financial system, RBI said in a notification addressed to banks, urban cooperative banks, NBFCs, payment and small finance banks.
Personal loans have about 80 per cent share in exposures restructured under regulatory package 2.0 by eight banks who have declared results for the second quarter. The remaining 20 per cent are loans to individuals used for business and credit to MSMEs. The total recast exposure of these banks under One Time Restructuring (OTR 2.0) was Rs 27,708 crore.
Fitch Ratings on Monday said the shock to economic activity from the latest wave of COVID-19 pandemic will be less severe than the one in 2020, but recovery is likely to be delayed as economic activity dropped in April-May. The global rating agency said there are growing indications that the latest wave of COVID-19 infections will add to risks among financial institutions (FIs) and anticipates that the Reserve Bank of India (RBI) may introduce additional measures to support the financial sector if indications of economic stress mount.
SBI remains a favourite of most brokerages in the PSB segment.
Is the SBI chairman leaving the bank in a stronger and better position than what it was? Abhijit Lele finds out.
According to the RBI's Financial Stability Report, the industry's gross bad-loan is at a 14-year high. As RBI's March 2017 deadline for banks to clean up soured credit looms closer, Shailajanand Mishra takes stock of just how bad the situation is.
After showing a consistent rise in the previous 4 quarters, gross NPAs of 40 listed bank declined to Rs 10.03 trillion at the end of June 2018, from Rs 10.25 trillion in the previous quarter.
Superseding the boards of two non-banking financial companies (NBFCs) in the Srei group will neither create liquidity challenges for sound entities, nor build systemic crises because the markets have factored in the problems with the Kolkata-based firms. Such regulatory steps will help in making the NBFC space more robust, bankers and market experts said. The action should have begun earlier because the Reserve Bank of India (RBI) had done a special audit last financial year and asked the group to make provisions for assets considered stressed, analysts said.
Despite several challenges plaguing the banking sector, HDFC Bank has emerged as the best bank in India.
The country's largest private lender HDFC Bank's bad-loan write-offs doubled to Rs 3,100 crore in the April-June quarter (first quarter, or Q1) of 2021-22 (FY22), from the level of Rs 1,500 crore in the same quarter of 2020-21 (Q1FY21). It also offloaded its non-performing assets (NPAs) amounting to Rs 1,800 crore in Q1FY22 to maintain a robust asset quality profile. It had jettisoned NPAs worth Rs 1,000 crore in the last quarter. Lenders knock off stress assets from books after making full provisions. Their right to recover dues from delinquent borrowers remains intact after the write-downs.
For the near term, Gill will have to improve relations with the Reserve Bank of India, which have been strained in recent times. He will also need to strengthen the bank's asset quality and improve governance standards and internal processes.
IndusInd Bank was the top laggard in the Sensex pack, falling over 5 per cent, followed by HDFC, Axis Bank, PowerGrid, SBI, Bajaj Finserv and Bharti Airtel.
Global rating agency Standard & Poor's today said 2014 will continue to be a challenging year for the asset quality and profitability of the country's banks as the economy is expected to make a tepid recovery.
'Indices will remain range bound in 2022 as earnings catch up with the current multiples.'
While HDFC Bank has vowed to recoup its lost market share in the credit card segment in three to four quarters by aggressively sourcing new cards, brokerages believe it is a little hard to come by, given how competitive the landscape has become, with other players in the market becoming equally aggressive to gain market share. Kotak Institutional Equities in its report on Monday said, "We would like to believe that the recovery in market share is likely to be gradual, if any. "All the key players, including Axis Bank, are now willing to expand their credit card portfolios as they have tested quite well against Covid-19."
'Overtightening of monetary policy by central banks and the spread of new Covid variants, which may force governments to restart lockdowns or restrict mobility.'
The Union Cabinet has cleared a proposal to provide Rs 30,600 crore government guarantee for security receipts issued by the National Asset Reconstruction Company (NARCL) as part of resolution of bad loans, Finance Minister Nirmala Sitharaman said on Thursday. The proposed bad bank or NARCL will pay up to 15 per cent of the agreed value for the loans in cash and the remaining 85 per cent would be government-guaranteed security receipts. The government guarantee would be invoked if there is loss against the threshold value.
The country's largest private sector lender HDFC Bank on Saturday reported a 23 per cent jump in standalone net profit to Rs 10,055.20 crore for the March quarter, led by growth in loan demand across categories and lower provisioning as bad loans were trimmed. The bank's net profit during the corresponding period of the previous fiscal stood at Rs 8,186.51 crore. "After providing Rs 2,989.5 crore for taxation, the bank earned a net profit of Rs 10,055.20 crore, an increase of 22.8 per cent over the quarter ended March 31, 2021," HDFC Bank said in a regulatory filing.
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.
In the quarter gone by (Q3 of FY22), private lender HDFC Bank issued around 950,000 credit cards, its highest ever credit card issuance in any single quarter. Since the Reserve Bank of India (RBI) revoked the embargo on it in August 2021 to issue new credit cards, the lender has issued 1.37 million credit cards. This is according to a senior bank executive, who was present in an analysts' call after the lender's Q3 earnings. In Q3, we achieved the highest ever issuance, with 950,000 card issuances.
The areas for improvement include greater de jure independence of regulatory agencies, consolidated supervision of financial conglomerates and reductions in the large exposures and related-party lending limits in banks.
Moody's, which cut its FY14 growth estimate to 4.5 per cent recently, said economic growth will be lowest in a decade.
There has been a "sharp decline" in collection efficiencies in retail asset pools across asset classes in May due to the second wave of the pandemic, with microlenders witnessing a dip of up to 20 per cent, a report said on Monday. "ICRA has observed a sharp decline in the collections of its rated securitisation transactions in April 2021 (i.e. May 2021 payouts), following the rise of COVID-19 cases and imposition of lockdowns/movement restrictions which has impacted the operations and collection activities of the NBFCs and HFCs," the report from domestic rating agency ICRA said. A major part of the country was undergoing localised lockdowns till May-end in the second wave, which saw new cases top 4.14 lakh and resulted in over 4,500 deaths daily at its peak.
Rising bad loans continued to haunt public sector banks (PSBs) in the March 2016 quarter.
Despite unprecedented levels of uncertainty in Samvat 2077, investors have little to complain about on the returns front. The BSE Sensex delivered returns of 38 per cent in this period, while the Nifty registered a return of over 40 per cent. As is the case in bull markets, companies in the small- and mid-capitalisation basket outperformed the benchmarks, with returns almost twice those of frontliners.
Bankruptcy Code will consolidate existing laws related to liquidation and sick industries
