The Economic Survey of this year recommended a ‘bad bank’ to kickstart the resolution of non-performing loans in the banking industry. However, this is not a definite solution for the system, believes Suresh Ganpathy of Macquarie Capital Securities India.
The European Central Bank expects euro zone banks with high levels of unpaid loans to submit "ambitious and realistic" plans to bring them down, it said on Monday, as it published guidelines on non-performing loans (NPL).
M&M Financial Services expects March to be a good month for collection with good sowing and harvest. The company has seen a good growth in disbursement in January compared to December.
Everybody in the NBFC space has seen a decrease in cost of funds and the company per se has shifted their mix more towards debentures, said Vellayan Subbiah, Managing Director, Cholamandalam Investment and Finance.
The brokerage firm says PSU banks should remain structurally challenged given high NPL formation, weak coverage, very low pre-provision operating profit (PPoP) buffers and low capital while private banks should keep gaining share in profitable areas.
In an interview to CNBC-TV18, Pawan Singh, Director & CFO of PTC India Financial Services spoke about the latest happenings in his company and sector.
Larger gains from the merger of associate banks will be seen only over 1-2 years, B Sriram, MD and Group Executive- National Banking at State Bank of India.
Global equities are set to enter a difficult period in the second half of 2017 and a confluence of three major factors will see a sell-off in stock markets, according to analysts at Credit Suisse.
In an interview to CNBC-TV18, Ananthasubramanian says the bank's savings deposits grew 14 percent year-on-year during the quarter. Also, the share of Current Account and Savings Account (CASA) funds has risen to 41.4 percent vs 38.9 percent on a YoY basis
However, the long-term Issuer Default Rating (IDR) has been rated with a good credit quality of 'BBB-' with a stable outlook.
Shang Fulin, chairman of the China Banking Regulatory Commission (CBRC), urged banks to elevate risk management to a "more prominent" place and take measures to "rein in the rapid rise of non-performance loans" at the regulator's half-year meeting, according to a statement on the CBRC's website.
"Gross NPAs could be nearing peak levels. We project banks gross NPAs to be in the range of 8-8.5 percent by March 2017," it said in a report here.
India's banks will need about USD90 billion to meet global Basel III rules which are due to be fully implemented by March 2019, Fitch Ratings said, calling the requirements "onerous" given the lenders' weak asset quality and internal capital generation
Rating agency Fitch has downgraded the banking sector outlook to negative, from stable, due to more downside risks emanating from rising stressed loans and weak corporate earnings, which may further roil banks
Performance Highlights Standalone profit ...
Performance Highlights Standalone profit ...
Governor Raghuram Rajan cut the marginal standing facility rate, i.e. the amount banks can borrow from the RBI for emergencies, by 75 basis points and said he will ensure liquidity conditions are closer to neutral instead of the previous standard, a 1 percent deficit of net demand and time liabilities (NDTL).
Considering the pressure from both existing and incremental non-performing loans (NPLs), the industry's earnings estimate has been pared by over 20 percent, the JP Morgan note says adding, "Slow growth and high real rates should continue to be an overhang."
"We currently forecast stress loans to peak in FY16â€”but see risk to asset quality stretching into FY17 if the macro recovery continues to be elusive and commodity prices fall," says a report by Goldman Sachs.
"Consequently, unless the government revises upwards its capital infusion plan for the banks in its upcoming budget, the banks will see negative pressure on their credit profiles," said Srikanth Vadlamani, Moody's V-P and Senior Credit Officer.
According to CLSA, Q4 NPL addition is likely to be over Rs 70,000 crore (though a bit down QoQ) and, like Q3, 90 percent of this could be from PSU banks - their stressed loan ratios are now at 11-23 percent.
Strengthening NPL recovery teams/processes, rebalancing its loan mix by increasing share of better rated corporate loans as well as retail loans, and scaling-up its digital platform are few initiatives it is taking to spearhead its growth forward.
Of the 7.8 per cent gross NPL, 1.5-1.7 per cent of the increase will be due to the shift to 120-day NPL recognition norm in financial year 2016-17 from 150-days at financial year 2015-16.
Speaking to CNBC-TV18 Keki Mistry of HDFC said that Seventh Pay Commission will put more money into people's pockets. There will be a demand for white goods, cars, houses as consumption will increase.
Speaking on the sidelines of a central nank board meeting held in Mizoram on Thursday, Raghuram Rajan said that the Bank of Baroda case does raise some questions over the fraud detection system that is in place right now