ICICI Bank Ltd, India's biggest private sector lender by assets, reported a marginally better-than-expected 12 per cent rise in quarterly profit and said its bad-loan ratio fell sequentially, sending its shares more than 5 per cent higher. Net profit rose to 29.76 billion rupees ($465 million) for its fiscal first quarter to June 30, from 26.55 billion rupees reported a year earlier, the lender, which is also listed in New York, said in a statement. Analysts on average had expected ICICI Bank to report a net profit of 29.2 billion rupees, according to data compiled by Thomson Reuters. Gross bad loans as a percentage of total loans fell to 3.68 per cent from 3.78 per cent in the March quarter although they were higher than the 3.05 per cent reported a year earlier. Indian banks have seen their bad loans almost double in the past three years as a weak economy limited companies' ability to service debt. While the dominant state-run lenders account for the majority of the bad loans, private sector lenders like ICICI have also seen their troubled loans rise. Brokerage Ambit said this week it expected the pressure on ICICI's asset quality to continue with fresh addition of bad loans and increased slippages from restructured loans. ICICI's first-quarter net interest income grew 14 percent over a year earlier, while non-interest income rose 5 percent . Net interest margin rose to 3.54 per cent from 3.4 per cent a year earlier. Retail loans grew 25 per cent, faster than the 15 percent increase in overall credit. Shares in ICICI Bank were trading 5.8 per cent higher by 12:35 IST GMT in a Mumbai market that gained 1.26 per cent. The stock has underperformed the bank Nifty and the Nifty this year.
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Kotak Mahindra Bank, India's fourth-biggest private sector lender by assets, expects its credit costs to jump this fiscal year as it makes more provisions related to its purchase of smaller local rival ING Vysya Bank, it said on Thursday. Kotak Mahindra agreed in November to buy ING Vysya for $2.4 billion in what was the country's biggest bank takeover. The operations were combined effective April 1. Kotak Mahindra's credit costs will be about 80 basis points for the fiscal year to March 2016, compared with 30 basis points last year, Managing Director Uday Kotak said after the lender reported a 56 percent decline in its first-quarter profit. "A significant amount of provisioning requirements of the combined company are behind us. Going forward, for the rest of three quarter between July and March, we expect incremental credit cost of about 0.50 per cent on the combined balance sheet," Kotak said. Provisions including for bad loans and employee retirement benefits jumped 22 times from a year earlier, dragging down Kotak Mahindra's net profit to 1.89 billion rupees ($29.52 million) for the three months to June 30, from 4.29 billion rupees a year earlier. The lender had taken "some of the tougher calls" on provisioning which will continue for the rest of this fiscal year, billionaire Kotak told a news conference, adding he saw credit costs coming down to a "normalised" level from next year. "This merger is extremely value accretive and we see significant benefits flowing through as we go into future," Kotak said. Gross bad loans as a percentage of total loans rose to 2.31 percent in the June quarter compared with 1.85 percent in the March quarter. Provisions totalled 3.05 billion rupees. Kotak Mahindra has moved the stressed loans that came to it through the ING Vysya acquisition to an internal "bad bank" and is focusing on recovery, Dipak Gupta, a joint managing director at the lender said. (Agencies)
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India's second-biggest state-run lender by assets Bank of Baroda forecast growth in troubled loans to slow in the coming quarters due to its moves to curb risk, as it posted a quarterly profit that beat estimates and sent its shares soaring.The bank, however, cautioned that the bad-loans pain was not entirely over, with some its peers such as Bank of India, the third-biggest state-run lender, reporting a spike in its bad loans for its fiscal first quarter.Mumbai-based Bank of Baroda reported on Thursday a net profit of Rs 10.52 billion ($164.50 million) for the three months to June 30 that was about 23 per cent lower than the year-ago quarter but higher than analysts' average estimate of Rs 9.29 billion.Even as its gross bad loans as a percentage of total loans rose to 4.13 per cent from 3.72 per cent in the previous quarter, Bank of Baroda said the additions to bad loans during the quarter had been lower than its initial expectations."I would love to say that we have seen the worst of the NPAs (non-performing assets) and the restructured and the stressed assets," Bank of Baroda Chief Executive Ranjan Dhawan told a news conference."But I am conscious of the fact that other banks have also declared very high levels of stressed assets. So I feel that the pain is not entirely over," he said.Kotak Securities analyst Saday Sinha said Bank of Baroda's stressed loans at 8.2 per cent were lower than its peers and called it a "positive".Indian banks' bad-loan ratio has almost doubled in the past three years amid weak economic growth that limited companies' ability to service debt. State-run lenders, who dominate India's banking sector, account for majority of the sour debt.Bank of Baroda is lending selectively to companies and is instead expanding faster in retail loans, Dhawan said. The bank is staying away from commodities, particularly steel, he said. Steelmakers have been hit by weak prices and surging imports from China."We are very very choosy, we hardly take any steel account," Dhawan said, adding other sectors the bank was "careful" about lending to included textiles, infrastructure and real estate.Bank of Baroda shares were up 9.5 per cent on Thursday afternoon, after rising as much as 10.5 per cent.($1 = Rs 63.9500)(Reuters)
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Yes bank on Wednesday (29 July) said that its net profit grew 27.7 per cent to Rs 551.20 crore for the quarter ended June 30, 2015, on higher net interest income. Bank’s net profit during the April-June quarter of the previous fiscal was Rs 431.54 crore. Its net interest margin (NIM), the key gauge of profitability, expanded to 3.3 per cent in the first quarter of the current fiscal, from 3 per cent in the year-ago period, Yes Bank said in a filing on BSE. Net interest income of the bank rose by 42.2 per cent, year-on-year, to Rs 1,059.80 crore, it said. Total income also increased to Rs 3,797.02 crore in the first quarter of 2015-16 as against Rs 3,093.19 crore in the same period of previous fiscal. However, bank’s asset quality slipped during the period under review, with gross Non-Performing Assets (NPAs) rising to 0.46 per cent of the gross advances as against 0.33 per cent a year ago. Similarly, net NPAs or bad loans also inched up to 0.13 per cent, from 0.07 per cent of net advances. Yes Bank’s total advances grew by 35.1 per cent to Rs 79,665.60 crore and total deposits grew by 25.2 per cent to Rs 95,315.90 crore as on June 30, 2015. “Yes Bank…has posted another satisfactory quarter of consistent results, which is reflected in strong loan growth, NIM expansion and continued resilience in asset quality,” said Rana Kapoor, Managing Director and CEO Yes Bank.The RBI approval for setting up IFSC unit in GIFT city in Gujarat will significantly enhance Yes Bank’s international banking product offerings for the Bank’s corporate clientele while enabling long term foreign currency fund raising for the bank at competitive rates, he said. “Also, RBI’s recent approval for the Bank to act as primary dealer will further complete our product suite in becoming a complete Rupee Debt House,” Kapoor added. Yes Bank stock was up 2.59 per cent at Rs 815.25 on the BSE after it declared results for the first quarter.(PTI)
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Reserve Bank of India (RBI) Deputy Governor S.S. Mundra said the latest April-June earnings from state-owned lenders showed "stability" in terms of non-performing assets (NPAs), but added the central bank would remain "watchful." India's banking sector, dominated by more than two-dozen state-run lenders, has been hobbled by its highest bad-loan ratio in a decade as slower economic expansion hurt companies' abilities to service debt. "I think the results which have come, on the NPA front, there looks like some kind of stability now," Mundra told Reuters on the sidelines of a conference on Wednesday. "It is not back to the absolutely normal position," he added. "It would need a constant watch from us."(PTI)
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Punjab National Bank (PNB), India's fourth-largest state lender by assets, could take control of some of the country's most heavily indebted steel companies and sell them on as part of a restructuring backed by New Delhi, bank officials said. PNB, a quarter of whose nearly $4 billion portfolio of steel loans is stressed, is considering taking charge of some companies over the next two years, changing their management and then selling stakes, Executive Director K.V. Brahmaji Rao said. The bank is also talking to its lending partners about carrying out debt-for-equity swaps, which would dilute the stakes of existing shareholders and give creditors majority ownership, but nothing has been finalised. "We are getting feelers from some local investors who are interested to buy stakes in these companies," Rao told Reuters on Tuesday, declining to name the borrowers or the interested parties. The issue has a broad significance in India, since banks, fearing more loans could go sour, have slowed financing to roads, ports and mining projects, strangling Prime Minister Narendra Modi's efforts to revive the economy. Total bad loans held by all banks are estimated to be at a decade-high of $49 billion. PNB, fellow government-controlled State Bank of India and other lenders are saddled with stressed loans of about $23 billion to the steel industry, which is struggling with weak prices and surging imports from an oversupplied China. Among steel companies, debt-heavy Electrosteel Steels Ltd said on Monday its lenders would restructure its loans, while Bhushan Steel is another big borrower. Nittin Johari, finance head of Bhushan Steel which recently restructured its $5 billion debt, said he was not aware of any plans by lenders to seek control of any company. The finance ministry is considering a rescue package for steel companies, including hiking India's 10 percent import duty and injecting funds into companies deemed viable, a senior ministry source said. A senior steel ministry official said raising the import duty was a priority. (Reuters)
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Three of India's leading state-run lenders reported a drop in their first quarter net profits, weighed down by rise in provision for bad loans and cooling expectations of a turnaround in the country's dominant but ailing government banking sector. India's banking sector, dominated by more than two-dozen state-run lenders, has been hobbled by its highest bad-loan ratio in a decade as slower economic expansion hurt companies' abilities to service debt. While the pace of additions to bad loans has started slowing for most banks, higher provisioning is hurting their profits. State-run lenders also account for a majority of the sector's bad loans. Bank of India Ltd, the nation's third-biggest state-run bank by assets, saw its profit for the three months to June plunge 84 per cent from a year earlier, while its bad loans ratio jumped to a 13-year high of 6.8 per cent. The Mumbai-based lender is stepping up bad loan recovery efforts and aims to keep its bad loan ratio for the full fiscal year to March 2016 at lower levels than 5.39 per cent for the last fiscal year, chief executive B P Sharma told reporters. "We have deployed majority of our resources to focus on recovery and merit-based upgradation of stressed account," he said, adding the bank will be "a little bit stringent on taking exposure on risky accounts". Bank of India's gross bad loan ratio of 6.8 per cent as of end-June was the highest since 2002, he said. The bank's shares ended 5.7 per cent lower to their lowest close since September 2013 in a Mumbai market that fell 0.3 per cent. "A turnaround will take some time. And it will depend on the overall industrial recovery in the country ," said R K Gupta, managing director at Taurus Asset Management. However, he said that he would be a buyer of shares in state lenders, which trade at a steep discount to their private-sector rivals. Punjab National Bank, the fourth-biggest state-run lender by assets, said its quarterly profit almost halved to Rs 721 crore. Its shares rose 5 per cent as its bad loans ratio fell from the previous three months, although it was still higher than a year earlier. Union Bank of India, the sixth-biggest state-run lender by assets, saw its first-quarter net profit falling 22 per cent to Rs 519 crore, which was ahead of analysts' estimate of Rs 499 crore. Its gross bad-loan ratio increased to 5.53 per cent in June quarter. The second-biggest state-run lender, Bank of Baroda, and the biggest private-sector lender, ICICI Bank, are due to report first-quarter earnings this week. The market leader, State Bank of India, reports earnings in August.(Reuters)
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Bank of Bhutan has selected TCS BaNCS for its Core Banking Solution to power its next generation banking services.TCS has an enviable track record of fail-proof core banking implementations across the globe which in turn, mitigates our core banking transformation risk. Its ability to reduce time to market for new bank offerings and to seamlessly integrate with third-party systems gives us the assurance that we have chosen the right partner, compant said in a press statement.Pema Nadik, Chief Executive Officer of the Bank of Bhutan, said, “TCS BaNCS will help us transform our technology ecosystem in keeping with our plans for quick growth and expansion.”Bank of Bhutan is the largest commercial bank in the Kingdom of Bhutan with a network of 46 branches, including extension branches, 62 ATMs, a state-of-the-art mobile banking solution and a dedicated Contact Center, fulfilling the banking needs of the public, business community and the Royal Government of Bhutan. Bank of Bhutan is at present on the Oracle FLEXCUBE CBS platform, having implemented it in the year 2009. With a focused goal of moving onto a high-growth trajectory, the Bank has embarked on a project of upgrading its core banking system and has selected TCS BaNCS as the solution partner for this engagement and to replace the existing system, after an in-depth evaluation of shortlisted vendors from a broad array of leading IT software providers.(BW Online Bureau)
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