Offline
| Post a Message | Explore Forums | Browse Stock Messages | Hot Discussions | Top rated Messages | Top Boarders | |
|
|
|
News Now
Important News of last week :Fitch Revises GE Capital Services India`s National Long-Term Rating Outlook to Negative
Posted by :
LalitdeshpandeyTracked by: 0 Boarder
Fitch Revises GE Capital Services India`s National Long-Term Rating Outlook to Negative
_____________________________________
Fitch Ratings-London/Mumbai/Singapore-29 September 2008: Fitch Ratings has today revised the Outlook on the National Long-term rating of GE Capital Services India (GECSI) to Negative from Stable, while affirming the rating at `AAA(ind)`. The `AAA(ind)` National rating of GECSI`s INR60bn long-term non-convertible debenture programme was also affirmed, together with the `F1+(ind)` rating on its INR7.5bn commercial paper programme.
The Negative Outlook reflects the continued underperformance of GECSI compared to other financial intermediaries in India and may lead in a downgrade by one notch over the next 12 to 18 months. The ratings remain underpinned by expectations of support from GECSI`s ultimate parent, GE Capital Corporation, USA (GECC), given the strategic role that GECSI is expected to play in GECC`s growth plans in India, including in commercial finance. While GECC`s implicit support for GECSI`s creditors helps set a `floor` for the National Long-term rating , this is lower than if the support was explicit, as provided by GECC in the past. GECSI`s performance may therefore make it necessary to differentiate its long-term rating from that of other stronger entities in India rated `AAA(ind)`. Nonetheless, GECSI is in the process of aligning its product suite (particularly in infrastructure and aircraft financing) with that of GECC, a major player in the global commercial finance market, which could enable it to revive its performance.
GECSI`s net income declined by close to 50% between FY04 and FY08 even as the Indian economy boomed. Competition from banks and caps on single party exposure (15% of equity) eroded its ability to take large exposures on better rated corporates and its importance as a financier of GE products has declined due to stronger competition from commercial banks.
Fitch believes that maintaining profitability will be a challenge given the dominance of banks in the commercial finance space and fee income streams are unlikely to support return on average assets (RoA: 0.89% in FY08) in the next 12 months. While lending margins have improved in recent years as GECSI passed on higher borrowing costs and increased its exposure to higher margin sectors like promoter funding and real estate, RoA declined as personnel costs increased.
Its capital adequacy (18.52% as on 31 March 2008) which is currently higher than the regulatory minimum, largely due to the contraction in the balance sheet, is likely to come under pressure as the company absorbs the INR15bn portfolio acquired from GE Transport Financial Services (GETFS), an associate company. The recent enhancement of capital adequacy requirements (from 10% currently to 15% by FY10) for non-deposit taking systemically important non-banking finance companies like GECSI is likely to bring capital in more focus.
GECSI, a subsidiary of GECC, extends secured loans to corporates for diverse purposes which include equipment and share purchase. A significant part of GECSI`s lending is to finance the purchase of GE products, although its share of this business has been declining. It is well integrated with GECC in terms of management resources, which also guides GECSI`s credit processes and risk management systems.
Contacts: Arshad Khan, Mumbai, +91 22 4000 1733; Ananda Bhoumik, Mumbai, +91 22 4000 1720.
Media Relations: Sylvia Garcia, San Jose, Tel: +506 296 91 82; Lisa Lim, Singapore, Tel: +65 6796 7214; Hannah Warrington, London, Tel: +44 (0) 207 417 6298.
Note to editors: Fitch`s National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated `AAA` and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as `AAA(ind)` for National ratings in India. Specific letter grades are not therefore internationally comparable.
Fitch`s rating definitions and the terms of use of such ratings are available on the agency`s public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch`s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the `Code of Conduct` section of this site.
***
Fitch Ratings is one of the three large global credit rating agencies. Fitch rates 6000 financial institutions, including some 3,200 banks and 2,400 insurance companies, more than 1,700 corporates and 100 sovereigns as well as public finance, sub-sovereigns and structured finance transactions.
Fitch India has four rating offices located at Mumbai, Delhi, Chennai and Kolkata. Fitch is recognised by Reserve Bank of India, Securities Exchange Board of India (SEBI) and National Housing Bank.
...
Tracked by: 0 Boarder
Zoombusiness, Could you please SMS ur mail ID or phone number to 09331055946. One of these days I would be looking out for someone to manage my portfolio...
In reply to:
Global Financial Scenario Continues To Be Worrie some
Posted by :
zoombusiness
Sensex Down 6 Pct At 11775 As Global Financial Scenario Continues To Be Worrie some 
Tracked by: 0 Boarder
Zoombusiness,
Can you name five good penny stocks below Rs 10 for me please. Thanks...
In reply to:
Global Financial Scenario Continues To Be Worrie some
Posted by : zoombusiness
Sensex Down 6 Pct At 11775 As Global Financial Scenario Continues To Be Worrie some
Tracked by: 0 Boarder
Nomura Holdings, Japan\`s largest broker, said on Monday it would buy the Indian back-office units of collapsed U.S investment bank Lehman Brothers for an undisclosed sum -
R M India -...
Tracked by: 0 Boarder
Sensex Down 6 Pct At 11775 As Global Financial Scenario Continues To Be Worrie some...
Tracked by: 0 Boarder
Gujarat is the best place for Nano project......
Tracked by: 0 Boarder
Market at 11900 now lowest today...
Tracked by: 0 Boarder
Market news--162 stocks hit 52-week lows...
Tracked by: 0 Boarder
India Corporate Tax Receipts At 952.8 Bln Rupees Up To End-Sept, Up 35.65 Pct Yr/Yr - Govt
India Total Direct Tax Receipts Up To End-Sept At 1.47 Trillion Rupees, Up 32.5 Pct Yr/Yr - Govt.
-courtesy R M India-
...
Tracked by: 0 Boarder
MCX-SX to start live trading in currency futures from tomorrow...
Tracked by: 0 Boarder
S&P Downgrades Pakistan Further Into Junk Territory...
Tracked by: 0 Boarder
what is target price for RPL in Dec\\\\\\\\\\\\\`08...
Tracked by: 0 Boarder
ndo-US civilian nuclear deal may be signed on 13 October in Washington, after missing the 4 October schedule, when US Secretary of State Condoleezza Rice visited New Delhi on her farewell tour.
Although, there will be a new venue and schedule, the two signatories will remain same: External Affairs Minister Pranab Mukherjee will travel to Washington and sign the agreement there with Rice.
According to top sources, the government didn`t see any problem in the delay. Rather it suited the UPA government as it wants to see the final shape of legislation after President George W Bush signs it into the law.
According to sources, as the senate has added supplementary legislations and the Hyde Act still remains relevant for the US administration India wants to see which are the areas Bush highlights in his notification. South Block expects the occasion will clear certain misgivings. At her joint press conference with Mukherjee on Saturday, Rice maintained: "The Hyde Act is completely consistent with 123 Agreement....123 Agreement is consistent with the Hyde Act. The US will keep its commitments to both."
Rice said on Saturday that Bush`s signing of the legislation into law had got delayed due to "administrative" reasons and there were "no open issues" involved. The US Congress had approved the agreement last week.
After the talks between Rice and Mukherjee, the two sides had expressed hope that the 123 agreement would be signed soon.
South Block had earlier earmarked two dates—October 4 and 13—for Condoleezza Rice`s visit to India and signing the Agreement with her. As she had already visited India last week, Mukherjee now has to travel to Washington as per diplomatic protocol.
"The President will sign the legislation very soon. He wants to do it very soon. There are administrative details," Rice said at the joint press conference with Mukherjee.
"Let me be clear, the 123 agreement is done. It is a matter of signing and so I don`t want anyone to think that we have open issues." said Rice, who also met Prime Minister Manmohan Singh and Opposition Leader L K Advani.
BS..........................
Tracked by: 0 Boarder
Parsvnath Developers Limited (PDL), India’s leading Real Estate Company with pan India presence having diversified portfolio, has announced the launch of Parsvnath Pratishtha, a Group Housing project at Pune....
More from General
Poll
Udayan's Market Outlook
 |
Gear up for tough morning today | |
| ||
| Udayan Mukherjee, Stocks Editor, TV18 | ||
 |
Popular Boarders 7days| 266 | |
| 175 | |
| 113 | |
| 100 | |
| 92 | |
Top Tracked 7days| 700 | |
| 694 | |
| 571 | |
| 458 | |
| 433 | |
Prolific Boarders 7days| 429 | |
| 336 | |
| 321 | |
| 227 | |