Specialist in Indian Banking and Economic Research

Hemindra Hazari

Thematic (Sector/Industry)

The surge in non-performing assets (NPAs) in the Indian banking industry disguises a lesser known issue of a larger percentage surge in bad loans from the overseas branches of banks, particularly from select new private sector banks having significant foreign ownership. While the growth in overseas NPAs is from a low base as compared with domestic NPAs, the quantum is not insignificant. Some of the banks adventurously ventured into overseas markets, but, it appears, ended up extending foreign currency loans to highly leveraged Indian companies, which may have resulted in significant contamination of their overseas portfolio and consequently a belated contraction of their overseas assets.

The surge in non-performing assets (NPAs) in the Indian banking industry disguises a lesser known issue of a larger percentage surge in bad loans from the overseas branches of banks, particularly from select new private sector banks having significant foreign ownership. While the growth in overseas NPAs is from a low base as compared with domestic NPAs, the quantum is not insignificant. Some of the banks adventurously ventured into overseas markets, but, it appears, ended up extending foreign currency loans to highly leveraged Indian companies, which may have resulted in significant contamination of their overseas portfolio and consequently a belated contraction of their overseas assets.

Senior investment analyst

Pallavi Deshpande

Equity Bottom-Up

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of pain to the new private sector banks, however, <a href="https://www.smartkarma.com/entities/160" target="_blank" data-smartkarma-citation="entities:160:1">State Bank Of India's (SBIN IN)</a>(SBI) chose not to make similar disclosures and saved itself from the pain. We believe SBI was busy preparing for the merger and the clean-up of books took a back seat, with the above dispensation from the RBI being a quid-pro-quo for complying with its merger dictate. You can…

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of pain to the new private sector banks, however, State Bank Of India's (SBIN IN)(SBI) chose not to make similar disclosures and saved itself from the pain. We believe SBI was busy preparing for the merger and the clean-up of books took a back seat, with the above dispensation from the RBI being a quid-pro-quo for complying with its merger dictate. You can…

SBI: Rises Above the Law as It Complies with RBI's Merger Dictate

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

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<ul>
<li>Our proprietary corporate governance scoring system now covers over 1,725 stocks including nearly 200 Banks and Financial Institutions.</li>
<li>This report includes all of the Banks and Financial Institutions currently under coverage.</li>
<li>The lowest score in this group is Bank of Baroda from India (30/100).</li>
<li>The Financials outside of Asia have slightly better governance.</li>
<li>Banks in Saudi and GCC score very high.</li>
<li>We would be happy to provide the detail on the scores if that is of interest.</li>
<li>Our clients routinely ask…</li>
</ul>


Our proprietary corporate governance scoring system now covers over 1,725 stocks including nearly 200 Banks and Financial Institutions.
This report includes all of the Banks and Financial Institutions currently under coverage.
The lowest score in this group is Bank of Baroda from India (30/100).
The Financials outside of Asia have slightly better governance.
Banks in Saudi and GCC score very high.
We would be happy to provide the detail on the scores if that is of interest.
Our clients routinely ask…


Corporate Governance at Banks in Emerging Markets - Scores on Over 150 Names - Many Widely Held

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the capital market.  The cause for concern is the BJP’s promise to the UP electorate to waive off all farm loans and provide fresh loans at zero per cent interest. Media, capital market analysts and prominent bankers have jumped on the bandwagon of moral hazard, ruining the loan payment discipline amongst farmers and apprehensions that the sacrosanct fiscal deficit may be breached as a consequence of such ‘populist’ policies. The BJP electoral promise raises some issues which need to be explored further on whether the central government has the fiscal space to provide for a total farm waiver and whether the criticism of moral hazard is credible.

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the capital market.  The cause for concern is the BJP’s promise to the UP electorate to waive off all farm loans and provide fresh loans at zero per cent interest. Media, capital market analysts and prominent bankers have jumped on the bandwagon of moral hazard, ruining the loan payment discipline amongst farmers and apprehensions that the sacrosanct fiscal deficit may be breached as a consequence of such ‘populist’ policies. The BJP electoral promise raises some issues which need to be explored further on whether the central government has the fiscal space to provide for a total farm waiver and whether the criticism of moral hazard is credible.

U.P. Loan Waiver: 'Populist' or a Necessity?

Asia focused research insights & advisory, Asia Advisors

Vinay Patel

Asia focused research insights & advisory

Asia Advisors

Asia Advisors is an independent financial advisory and research firm working closely with corporates and institutions to provide consulting solutions & research insights. We provide advisory services including capital solutions, business strategy and investment insights.
Firm is headed by Vinay Patel who has close to two decades of experience in research and business development at large, international investment banks such as HSBC and ICICI Securities. Led research efforts in areas of Macroeconomics, Asset Allocation & Investment Strategy for close to a decade in global & domestic research teams. As a business head in Singapore, advised top global investment management firms & Portfolio managers in Asia for India related investments.
Vinay was recently joined by Swapnil Manish, an investment banker and ex-ecommerce entrepreneur with more than 12 years of experience. Swapnil was the TMT banker at BNP Paribas and was part of several large M&A and ECM transactions (Bharti-Zain, Bharti Infratel IPO, Schneider-Zicom among several others). He's also had a stint as an ecommerce entrepreneur having launched & led Mumbai's first online grocery player.

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this win to ease Modi's chances for another term at national elections in 2019 and that would give him total 7 year period to push for reforms (In his victory speech Modi himself said he is now looking for delivering by 2022 - the 75th year of Indian Independence). Amidst the euphoria of Modi's victory, we would like to highlight some of the ground realities…

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this win to ease Modi's chances for another term at national elections in 2019 and that would give him total 7 year period to push for reforms (In his victory speech Modi himself said he is now looking for delivering by 2022 - the 75th year of Indian Independence). Amidst the euphoria of Modi's victory, we would like to highlight some of the ground realities…

Investors Need To Be Patient With Reform Momentum Even As Modi Win Ensures Policy Continuity

India

Bank of Baroda owns and operates commercial banks in India.  The Group's banks provide the traditional forms of banking services, including CD's, Credit Card services and a variety of car loans, in addition to gold banking and a range of insurance services.  The Group also owns IBU International Finance Limited, an international banking company in Hong Kong.

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Bank Of Baroda (BOB IN)

Chickens Abroad Come Home to Roost

The surge in non-performing assets (NPAs) in the Indian banking industry disguises a lesser known issue of a larger percentage surge in bad loans...

Hemindra Hazari

SBI: Rises Above the Law as It Complies with RBI's Merger Dictate

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of...

Pallavi Deshpande

Corporate Governance at Banks in Emerging Markets - Scores on Over 150 Names - Many Widely Held

Our proprietary corporate governance scoring system now covers over 1,725 stocks including nearly 200 Banks and Financial Institutions. This...

David Riedel

U.P. Loan Waiver: 'Populist' or a Necessity?

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the...

Hemindra Hazari

Investors Need To Be Patient With Reform Momentum Even As Modi Win Ensures Policy Continuity

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this...

Asia Advisors

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