Tag: Banking

RBI to hold rates for a while before another rate cut: HSBC

RBI to hold rates for a while before another rate cut: HSBC

17/08/2017 17:02

A report has said that inflation numbers have risen as expected and the Reserve Bank will go in for a prolonged pause before cutting rates again.

Commenting on the issue, a British brokerage HSBC Official told the media, “We expect the RBI to be on a prolonged pause from here onwards with the risk of a 0.25 per cent rate cut (to our assumption) by the year-end if retail inflation undershoots the 4 per cent target by a comfortable margin.”

The brokerage attributed the jump in inflation numbers to rising vegetable prices, but underlined that core inflation excluding food, fuel ticked up after moderating for three straight months.

“We expect the HRA impact to show up further over the next six months. Thankfully, the RBI has mentioned that it will overlook this direct statistical impact of HRA, so prima facie, the rise in core inflation is nothing to worry about,” he added.

RBI widens Basel-III-compliant asset base of banks

RBI widens Basel-III-compliant asset base of banks

03/08/2017 12:25

Ahead of the implementation of the stringent capital requirements under the Basel-III regime from 2019, the Reserve Bank amended a slew of previous regulations on the same, helping banks shore up their capital buffers and improve liquidity coverage ratios, reported PTI.

Accordingly, the new amendments widen the assets of banks such as the excess CRR; excess G-secs holdings in SLR; and also excess g-secs under marginal standing facility, which all would now be included in the stock of liquid assets without any limit as also without applying any haircut, the central bank said in a notification.

The regulator said liquid stock will also include marketable securities issued/guaranteed by foreign sovereigns which have only 0 per cent risk weight under the Basel II standardised approach for credit risk; actively traded repo or cash markets operations with zero risks, reserves held with foreign central banks in excess of the reserve requirement.

It said the RBI reserves would include banks’ overnight deposits and term deposits with the central bank which are explicitly and contractually repayable on notice from the depositing bank or which constitute a loan against which the bank can borrow on a term or on an overnight basis but automatically renewable basis.

Other term deposits with the central bank are not eligible for this. However, if the term expires within 30 days, the term deposits could be considered as an inflow, the RBI circular added.

Today’s circular amends some key sections of all the previous ones on the Basel norms, including the Master Circular on ‘Basel III Capital Regulations’ dated July 1, 2013.

UCO Bank Q1 loss widens to Rs 663 cr

UCO Bank Q1 loss widens to Rs 663 cr

02/08/2017 16:30

Government-controlled UCO Bank on Wednesday reported widening of standalone net loss to Rs 663.02 crore for the first quarter ended June 30, 2017.

“The public sector lender had posted standalone net loss of Rs 440.56 crore in the same period last year,” said UCO Bank in a filing to the Bombay Stock Exchange.

Interest income of the bank declined by 10.10 per cent at Rs 3766.58 crore for the quarter ended June 30, 2017 as against Rs 4189.64 crore in the corresponding period last year.

During the April-June quarter, total income dipped moderately by 10.38 per cent to Rs 4,237.04 crore from Rs 4,727.93 crore in the year ago period.

Meanwhile, operating expenses dropped by 7.40 per cent to Rs 3,627.96 crore from Rs 3,917.77 crore in the same period last year.

Operating profit slipped 24.82 per cent to Rs 609.08 crore from Rs. 810.16 crore.

Provisions and Contingencies surged by 1.73 per cent at Rs 1,272.10 crore from Rs 1,250.50 crore a year ago.

NII, the difference between interest earned on loans and interest paid on deposits, slipped by 14.61 per cent at Rs 841.47 crore versus Rs 985.45 crore in the year ago period. Non-interest income too dipped 12.60 per cent year-on-year to Rs 470.46 crore.

On the asset side, gross non- performing assets (NPAs) rose to 19.87 per cent of the gross advances as at the end of June 30, 2017 from a level of 17.19 per cent year earlier. Its net NPAs or bad loans too increased to 10.63 per cent of net advances on June 30, 2017 from 10.04 per cent a year ago.

Meanwhile, shares of the bank closed day’s trade at Rs 33.20 apiece, down 1.04 per cent, on the BSE.

IDBI Bank gets shareholders’ nod to raise Rs 10,000 cr

IDBI Bank gets shareholders’ nod to raise Rs 10,000 cr

20/07/2017 12:00

IDBI Bank’s shareholders have approved a proposal to raise up to Rs 10,000 crore through various modes including QIP, reported PTI.

The decision was taken at the bank’s annual general meeting, IDBI Bank said in a regulatory filing.

IDBI Bank said among the resolutions passed at the AGM were the issue of shares aggregating up to Rs 5,000 crore through various modes of issue including qualified institutions placement (QIP). And mobilisation in one or more tranches up to Rs 5,000 crore comprising of bonds by way of private placement/public issue.

Earlier in June, the bank had said that it requires to maintain its tier-1 capital and in view of ongoing expansion plans, implementation of Basel III norms and consequential capital charge, there is a “need to increase the capital to further strengthen the capital adequacy ratio.”

Yes Bank board to consider stock split on July 26

Yes Bank board to consider stock split on July 26

04/07/2017 12:30

Private sector lender, Yes Bank said that it will consider the proposal to divide the equity share of the company in a board meeting to be held later this month.

“A meeting of the board of directors of Yes Bank will be held on July 26, 2017 to consider sub-division of equity shares of the bank of the face value of Rs 10 each,” the bank said in a filing to the Bombay Stock Exchange.

However, the bank did not provide any further details on the ratio in which the shares will be divided.

Companies generally go for a stock division to improve liquidity of its shares in the stock market and to make them affordable to the small investors.

Meanwhile, shares of the Bank were trading at Rs 1490.05 apiece, down 0.22 per cent from the previous close at 12:35 hours on BSE.

RBI asks banks to provide sufficient details in passbooks

RBI asks banks to provide sufficient details in passbooks

23/06/2017 13:01

The RBI has said that it has asked banks to provide sufficient details of transactions in the passbooks and statements of accounts so that customers can cross-check them.

As per reports, earlier, the Reserve Bank had advised the banks to avoid unreadable entries in passbooks/statements of account and ensure that brief, intelligible particulars are invariably entered with a view to avoiding inconvenience to depositors.

Commenting on the issue, a RBI Official told the media, “It has come to RBI’s notice that many lenders still do not provide adequate details. In the interest of better customer service, it has been decided that banks shall at a minimum provide the relevant details in respect of entries in the accounts.”

As per reports, the details to be provided by banks in passbooks, include name of the payee, mode of transaction, nature of the charges (like fee/ commission/ fine/ penalty), and loan account number.

Federal Bank launches Rs 2,000-cr QIP

Federal Bank launches Rs 2,000-cr QIP

22/06/2017 11:32

South-based Federal Bank said that it has launched a institutional sale of shares, aiming to raise around Rs 2,000 crore or USD 310 million in capital. There is an option to upsize the issue by Rs 500 crore or USD 77 million, sources said.

In a regulatory filing, the bank said its credit committee, and investment and raising capital committee has authorised the opening of the qualified institutional placement (QIP) of shares on June 21.

The floor price has been set at Rs 117.04 per share and it can sell shares at a discount of not more than 5 per cent, it said in the filing.

Investment banking sources put the indicative price band of the share sale at between Rs 111.50 to Rs 116.70.

The bank is looking at issuing between 214.2 million to 224.2 million shares in the issue.

The bank scrip shed 1.81 per cent to close at Rs 116.85 at the BSE, as against a 0.04 per cent correction in the benchmark.

German lender Deutsche Bank, Kotak Mahindra Capital and IIFL Holdings are bankers to the issue.

Meanwhile, shares of the Bank were trading at Rs 118.20 apiece, up 1.16 per cent from the previous close at 11:0 hours on BSE.

Axis Bank signs pact to sell stake in Mswipe Technologies

Axis Bank signs pact to sell stake in Mswipe Technologies

21/06/2017 16:04

Private sector lender Axis Bank Ltd on Wednesday said it has inked a pact to sell 1,90,500 equity shares of Mswipe Technologies Pvt Ltd (Mswipe) for a total cash consideration of Rs 80.94 crore.

“The bank has signed an agreement for sale of 1,90,500 equity shares of face value of Rs 1 per share of Mswipe Technologies Private Limited (‘Mswipe’ or the ‘Entity’), at Rs 4,249 per share, resulting in a total cash consideration of Rs 80.94 crores,” Axis Bank Ltd said in a filing to the Bombay Stock Exchange on June 21, 2017.

Mswipe Technologies is primarily engaged in the business of merchant acquiring services.

The bank further said that, the transaction will be completed not later than July 2017.

The private sector lender has divested 8 per cent holding of Mswipe Technologies Pvt Ltd

Meanwhile, shares of the bank closed at Rs 507.55 apiece, down 0.83 per cent, from previous close on BSE.

RBI likely to step up forex buying; rate cut on cards

RBI likely to step up forex buying; rate cut on cards

15/06/2017 17:09

The Reserve Bank is expected to step up forex buying and may go for a 25 basis points cut in interest rate on August 2, says a report.

According to the US economists of global financial services major Bank of America Merrill Lynch (BofAML), going by the latest Federal Open Market Committee (FOMC) meeting, the US Fed is likely to withdraw liquidity from September.

“We expect the RBI to recoup forex reserves with our US economists now expecting the Fed to withdraw liquidity from September,” BofAML said in a research note.

On RBI’s policy stance, the report said, a 25 basis points or 0.25 percentage point rate cut in August is likely as the next Fed hike is expected only in December.

“On balance, we continue to expect the RBI to cut 25 bps on August 2, as our US economists now expect the Fed to push out the next hike to December. Withdrawal of Fed liquidity should also contain global commodity prices and by extension, ‘imported’ inflation,” the report added.

In the monetary policy review on June 7, the RBI left key rates unchanged with Governor Urjit Patel noting that the central bank wanted to be more sure that inflation will stay subdued.

HSBC sees India growth unchanged at 7.1% this fiscal

HSBC sees India growth unchanged at 7.1% this fiscal

08/06/2017 16:20

India’s growth is likely to remain unchanged at 7.1 per cent this fiscal, as investments are low and government spending may not remain high given the fiscal consolidation path the country is treading, says a report.

“Growth numbers were marked down marginally but still remain higher than ours,” HSBC said in a research note. It further said, “we have a below-consensus view that growth will be flat at 7.1 per cent in 2017-18”.

According to the global financial services major HSBC, output gap in the country is likely to remain negative for longer period of time.

In its policy review meet yesterday, the central bank also lowered its growth forecast to 7.3 per cent, from 7.4 per cent earlier.

The report said that investment still remained low in the country, while urban wages are growing but at multi-year lows. Moreover, government spending may not remain as high given the fiscal consolidation path, and the rise in exports over the last few months are showing some signs of moderation.

HSBC said though “rural growth could come in high if rains are strong, but that would just about offset the weakness from other sectors. This means that the output gap is likely to remain negative for longer”.

Regarding RBI’s monetary policy stance, the report said a prolonged pause is likely with risks of a rate cut in August.

“Given that we believe inflation expectations have fallen into a virtuous cycle, anchoring inflation at around 4 per cent, we do not find a pressing need for the RBI to either cut or hike policy rates by a large quantum,” it said.

However, there are risks of some moderate easing later in the year, particularly a 25 bps rate cut in August, if the current softness in inflation turns out to be durable, it added.

HSBC sees India growth unchanged at 7.1% this fiscal
08/06/2017 16:20

India’s growth is likely to remain unchanged at 7.1 per cent this fiscal, as investments are low and government spending may not remain high given the fiscal consolidation path the country is treading, says a report.

“Growth numbers were marked down marginally but still remain higher than ours,” HSBC said in a research note. It further said, “we have a below-consensus view that growth will be flat at 7.1 per cent in 2017-18”.

According to the global financial services major HSBC, output gap in the country is likely to remain negative for longer period of time.

In its policy review meet yesterday, the central bank also lowered its growth forecast to 7.3 per cent, from 7.4 per cent earlier.

The report said that investment still remained low in the country, while urban wages are growing but at multi-year lows. Moreover, government spending may not remain as high given the fiscal consolidation path, and the rise in exports over the last few months are showing some signs of moderation.

HSBC said though “rural growth could come in high if rains are strong, but that would just about offset the weakness from other sectors. This means that the output gap is likely to remain negative for longer”.

Regarding RBI’s monetary policy stance, the report said a prolonged pause is likely with risks of a rate cut in August.

“Given that we believe inflation expectations have fallen into a virtuous cycle, anchoring inflation at around 4 per cent, we do not find a pressing need for the RBI to either cut or hike policy rates by a large quantum,” it said.

However, there are risks of some moderate easing later in the year, particularly a 25 bps rate cut in August, if the current softness in inflation turns out to be durable, it added.