Indian Banks

The recapitalisation of banks, the slow absorption of bad loans in the system, and the normal growth that comes from a growing economy have led us to believe that PSBs are sailing smoothly

With everything going well, lenders should be turning cautious. But recent full-yr results show an opposite trend: Provisions for future loan losses are beginning to decline. This may not be prudent

Customer confidence may improve if recovery time, insurance coverage is better

The department under the finance ministry did not conduct an assessment of the capital requirement according to its own standard practice before recapitalisation

"Another instance of AT-1 bond write-off questions seniority of claims of AT-1 bond holders and dampens sentiments for AT-1 market issuances," Citi analysts wrote in a note

Calling for further improvement in banking services, Minister of State for Finance Bhagwat K Karad urged banks to treat their customers as God. Banks should focus on improving their customer service and work towards reducing pain points, Karad said while addressing a Customer Meet programme organised by Bank of Maharashtra (BoM) earlier this week. At the same time, he asked customers to be responsive and prompt in repayment of loans so that banks are financially healthy. With regard to Kisan Credit Card (KCC), he urged banks, including BoM for expanding the reach of KCC scheme to more farmers and ensure time-bound saturation. The banking industry needs to serve small and marginal farmers, youth and women agripreneurs and act as catalyst for growth, he said. India has now become the fifth largest economy in the world and is aiming to be a USD 5 trillion economy under the guidance of Prime Minister Narendra Modi, he said. Addressing the gathering, BoM Managing Director A S Rajeev s

Indian startups had deposits worth about $1 billion with embattled Silicon Valley Bank and the country's deputy IT minister said he had suggested that local banks lend more to them going ahead

Moody's said the impact of the two US banks going down will be limited in India and other financial institutions in the APAC region due to structural factors

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Mark-to-market impact on Indian banks seen limited thanks to HTM provisioning

"Despite concerns of a slowdown in loan growth and margin compression, the earnings upgrade cycle continues for the banking sector," the analyst wrote

A majority of domestic banks, particularly mid-sized and small ones, are grappling with issues on the ESG definitions applicable to lenders, how the norms will be built into ending decisions

This transition is not expected to change ratings on these banks

"To support credit-off take, banks are expected to shore up their liability franchise by raising capital (AT1 bonds, other debt instruments such as infrastructure bonds) and deposits," it said

While loans to this segment have been growing fast, defaults have thus far been few

A sustained improvement in the financial performance of Indian banks bodes well for the sector's intrinsic risk profiles, according to global rating agency Fitch. The pace of asset quality and profitability improvement has exceeded expectations, while capital buffers are broadly in line with the projections, it said in a statement. The sector's impaired-loan ratio declined to 4.5 per cent in the first nine months of financial year ended March 2023 (9MFY23), from 6 per cent at FY'22, it said, adding, this was nearly 60 basis points below Fitch's FY23 estimate. Increased write-offs have been a key factor, but higher loan growth, supported by lower slippages and improved recoveries, have also played a role, it said. Fitch expects a further improvement by FY23, although banks still face the risk of asset-quality pressure associated with the unwinding of loan forbearance in FY24. "The sector's improving provision cover (9MFY23: 75 per cent, FY22: 71 per cent) also supports banks' abili

The sector's impaired-loan ratio declined to 4.5 per cent in the first 9 months of FY23 (9MFY23), from 6.0 per cent at FY22

Net interest income of banks grew by a record 25.5 per cent to Rs 1.78 lakh crore in the December 2022 quarter on-year, driven by a healthy credit off-take and higher yield on advances, according to an analysis. The quarter saw banks booking higher yields on advances as the system-wide core profitability metric net interest margin (NIM) rose by 17 basis points (bps) to 3.28 per cent. This was possible as banks repriced existing loans higher at a faster rate and also increased the new loan pricing, but kept deposit rates almost unchanged, according to an analysis by Care Ratings' senior director Sanjay Agarwal. But the rise in NIM was led by private sector banks, thanks to their operational efficiencies, at 4.03 per cent, up 15 bps on-year. State-owned banks registered NIM at 2.85 per cent, up 17 bps on-year. Net interest income or NII is the main revenue head for banks and is the difference between interest earned on advances and the interest paid to depositors/funds raised from ...

Lenders should be able to offset impact by gradually passing on policy rate hikes to corporate loans: Agency

Indian lenders have around Rs 80,000 cr exposure in conglomerate, marking 38% of the conglomerate's total debt