HDFC Bank Q4 review: HDFC Bank's January-March quarter (Q4) results, for financial year 2022-23 (FY23), brought no cheer to investors as elevated costs, and merger-related uncertainties continue to dent the sentiment. Moreover, analysts fear that merger-related costs may put pressure on margins and cost to income ratio in the near-term, while the return on equity could moderate owing to low leverage of the parent. Analysts, therefore, opine that the stock's re-rating may be some time away. "While the risk of a de-rating on a standalone basis appears to be quite low given that the business performance is holding up well, we believe a re-rating in the stock would happen as and when more clarity emerges on the smooth transition (merger)," said a report by Sharekhan.
In terms of stock selection, India continues to benefit from two phenomena - the big getting bigger and availability of quality stocks in relative abundance compared with its Asian peers.
The groups plan to take on well-entrenched players like Amazon, Flipkart, and Paytm by merging their offline businesses with e-commerce initiatives.
There will be different ways of returning the money, depending on the profile of the depositors and the amount, predicts Tamal Bandyopadhyay.
SBI announced a 0.40 per cent cut in lending rate to 9.30 per cent, which is the most competitive in the market at present.
In addition, he will have to move swiftly to control any damage that may have been caused to the bank's image and investor confidence due to the loan controversy
The bank expects to grow loan book by 10 per cent in the current financial year with calibrated exposure to corporate accounts and thrust on the retail segment.
Shares of Yes Bank may face selling pressure as the Reserve Bank-mandated three-year lock-in period for individual investors and exchange-traded funds is ending on Monday, according to analysts. The analysts expect distress on the bank counter on Monday as they expect investors, primarily the nine banks led by State Bank, which picked up almost 49 per cent of its stocks in March 2020 for Rs 10 per share -- at a premium of Rs 8 on the face value as part of the RBI bailout, making an exit. Exchange-traded funds are also likely to press the exit button.
Indeed, there were frauds, and the politician-banker-industrialist nexus played a role in the rise of NPAs, but governance issues in Indian banking are far more nuanced and complex, reveals Tamal Bandyopadhyay.
Take a call to stay put or opt our based on whether you think the company will be able to find a strategic investor, suggests Sanjay Kumar Singh.
With strong long-term fundamentals, banking sector cannot be completely ignored
PSBs dominate India's banking system, meaning any failure could jeopardise financial stability, as such, we expect government support will remain forthcoming, said Moody's.
Why can't we have a sunset clause for the ARCs, which is a global norm? questions Tamal Bandyopadhyay.
After hiking interest rates thrice between September 2013 and January 2014, the central bank has maintained status quo, amid slowing economic growth.
For the fiscal ended 2021, the group has made a loss of Rs 5,943 crore on sales of Rs 11,723 crore, a drop of 66 per cent over fiscal 2020. The group's total debt was up by 7 per cent to Rs 20,742 crore.
The monsoon rains may have failed and crop output may be lower but, after a small blip, the rural markets are back on track.
'In 2022, active management, long-short strategies, multi-asset strategies, and asset allocation strategies need to be considered to meet long-term investment goals.'
'This is for the first time home loan rates have dropped below 7 per cent,' notes Tamal Bandyopadhyay.
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.
RBI Governor Shaktikanta Das kept the red flag on cryptocurrencies flying, warning that the next financial crisis can be triggered by private cryptocurrencies if such speculative instruments are allowed to grow.
The banking sector in India is reeling under Rs 8 lakh crore of non performing assets (NPAs) or bad loans, of which PSU banks alone account for over Rs 6 lakh crore.
Bank credit is likely to grow at a four-year high of 11-12 per cent in fiscal 2023, on the back of better economic growth and budgetary support from the government, according to a report. In the fiscal ended March 2022, bank advances have likely grown at 9-10 per cent. "Healthy economic growth and budgetary support from the government should lift bank credit growth by 200-300 basis points to 11-12 per cent this fiscal," Crisil Ratings said in the report. The higher credit growth expectation is also supported by the improved resilience of the banking system, it added.
Having issued over 21 lakh cards since lifting of curbs last year, the country's largest private sector lender HDFC Bank is planning to launch a slew of digital initiatives over the next few quarters, a top official said. The Reserve Bank had barred HDFC Bank from issuing new credit cards following incidents of outages in the lender's internet banking /mobile banking/ payment utilities over the previous two years. The curbs were partially lifted after eight months in August last year. Finally, in March 2022, the RBI lifted all restrictions placed on the bank, including digital launches.
The Reserve Bank of India (RBI) on Wednesday announced to increase the policy repo rate by 50 basis points to 4.9 per cent, the second hike in five weeks aimed at quelling the inflation. The MPC vote was unanimous and has decided to keep stance withdrawal from accommodative, RBI Governor Shaktikanta Das said in a press conference on Wednesday. The decision was taken during a three-day meeting of the RBI's Monetary Policy Committee (MPC) to review the interest rates in the country. The MPC voted unanimously to increase the policy repo rate by 50 bps to 4.90 per cent," Das said.
B Sriram, the senior-most managing director at SBI, along with fellow MDs Rajnish Kumar, P K Gupta, and Dinesh Kumar Khara had been interviewed for the post
'The Indian economy and the Indian financial sector today remain resilient and much better placed.'
The Centre should privatise all public sector banks (PSBs), except the State Bank of India (SBI). This is because private banks have emerged as a credible alternative to PSBs with substantial market share. Also, government ownership hinders the ability of the Reserve Bank of India (RBI) to regulate the sector, according to a report by the National Council of Applied Economic Research (NCAER).
What connects P S Jayakumar of Bank of Baroda, V Vaidyanathan of Capital First Ltd and Chandra Shekhar Ghosh of Bandhan?
While rate cuts may increase churn between banks, these may not boost credit offtake meaningfully.
In the past few years, banks have been reducing the spread of retail loans for new customers while keeping the base rate unchanged.
The proposed reorganisation plan by Reliance Industries Ltd to transfer its refining, marketing and petrochemical (oil-to-chemicals) businesses to a wholly-owned subsidiary is a step towards facilitating participation by strategic investors in the unit, Fitch Ratings said on Tuesday. The reorganisation of the business in Reliance O2C Limited (O2C) "will have a neutral impact on RIL's credit metrics and rating," it said in a statement. The transfer will be on a "slump sale basis", subject to attaining the requisite approvals.
Indian economy was growing faster than the global average and all other major economies: FM
Shaktikanta Das is a master of the finest balancing act who listens to all but takes his own decisions, discovers Tamal Bandyopadhyay.
Historically, overall credit has grown at 1.6 times GDP growth
Starting with a family, which had a dealership of Bajaj Auto's scooters, to becoming the owner of a household name in consumer appliances who could afford to have Bollywood superstar Shah Rukh Khan as the brand ambassador, Venugopal Dhoot's is a story of an aggressive small town businessman's pursuit to be on the top. Now arrested in connection with the ICICI Bank loan fraud case, Venugopal Dhoot during his heydays was not the one to simply sit on small achievements like Videocon becoming the largest television set manufacturer in India.
Two wheeler sales dropped in the past quarter as leading banks put two wheeler finance under high risk category.
'Marginal rates will definitely affect the consumer's decision in entering a new transaction, but in reality, they don't affect much because banks/financial institutions have come up with step-up EMIs: 50% of home loans which exceed 15 years in India are prepaid, within 7-8 years.' 'This doesn't happen anywhere in the world.'
'The consolidation of the world's fifth-largest economy in the hands of 15-20 corporate giants is a once-in-generation event, which we are focusing on.'
Beware: During the period that you avail of the moratorium, there would be no repayment of interest or principal. Thus, the outstanding will go up substantially for this period as a consequence
'If you are invested in mid-cap and small-cap stocks, even if you are making losses right now, it is better to sell them now and sit on cash.'
