India - Politics, Industrials, IT and Large Caps, EMAlpha

Pankaj Sharma

India - Politics, Industrials, IT and Large Caps

Thematic (Sector/Industry)

<h2>PSU Banks continue to report BAD NEWS on NPAs</h2>Just when there were hopes that finally, things may be getting better for Indian Banking System on Poor Asset Quality, some of the recent results indicate that it is still too early to think so.<ol><li>
<a href="https://www.smartkarma.com/entities/160" target="_blank" data-smartkarma-citation="entities:160:1">State Bank Of India (SBIN IN)</a> posts Q3 net loss of Rs18.87 bn. The nation’s largest lender saw its net bad loans ratio spiking to 5.61% of advances, from 4.24% during the third quarter of 2017-18. The gross dud assets ratio jumped meanwhile from 7.23% to 10.35%…</li></ol>

PSU Banks continue to report BAD NEWS on NPAsJust when there were hopes that finally, things may be getting better for Indian Banking System on Poor Asset Quality, some of the recent results indicate that it is still too early to think so.
State Bank Of India (SBIN IN) posts Q3 net loss of Rs18.87 bn. The nation’s largest lender saw its net bad loans ratio spiking to 5.61% of advances, from 4.24% during the third quarter of 2017-18. The gross dud assets ratio jumped meanwhile from 7.23% to 10.35%…

India: Is Banking System 'Out of the Woods' on Bad Loans? 3Q Results of PSU Banks Says Not Yet!

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

* The Indian government removed the biggest tail risk at SOE banks with its first tranche re-cap announcement, enabling the sector to take the necessary haircuts on its bloated NPL balances. State Bank of India (SBIN.IN) and Bank of Baroda (BOB.IN) are very well placed.* Another capital infusion is scheduled in FY20 which should further aid in addressing SOE bank provisioning needs. * No announcement of a consolidation plan with the weaker SOE banks came with the capital allocation plan.…

* The Indian government removed the biggest tail risk at SOE banks with its first tranche re-cap announcement, enabling the sector to take the necessary haircuts on its bloated NPL balances. State Bank of India (SBIN.IN) and Bank of Baroda (BOB.IN) are very well placed.* Another capital infusion is scheduled in FY20 which should further aid in addressing SOE bank provisioning needs. * No announcement of a consolidation plan with the weaker SOE banks came with the capital allocation plan.…

Indian SOE Banks – Positive/Massive Front-Ended Re-Cap Occurs

Specialist in Indian Banking and Economic Research

Hemindra Hazari

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?

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

The collapse of lending in India remains well in place in January where annual growth is running at an anemic 3.3%. This is the same as in December last year, and lower than in November. To us, it does not feel like India is anywhere near a post-demonetization boom in credit, as some are expecting. The reality is that companies will see more stress, economic growth will worsen, and banks will face greater NPLs. India – Credit growth (% ch YoY)<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/022/174/original/daniel%201.png?1488984550" class="editor-image img-responsive" data-smartkarma-image-id="22174"></figure><div class="content-caption">Source: CEIC</div>What may be more of a surprise is that…

The collapse of lending in India remains well in place in January where annual growth is running at an anemic 3.3%. This is the same as in December last year, and lower than in November. To us, it does not feel like India is anywhere near a post-demonetization boom in credit, as some are expecting. The reality is that companies will see more stress, economic growth will worsen, and banks will face greater NPLs. India – Credit growth (% ch YoY)Source: CEICWhat may be more of a surprise is that…

India's Lending Is Still Painfully Low in January

Since India’s demonetization, the government has lowered GDP forecasts, the Reserve Bank of India has signaled a less accommodative stance, and the proposed recapitazliation of ailing public sector banks is being curtailed. Perhaps there will be less flow-through on the budget in execution, timing and magnitude? High non-performing loans and cratering loan growth was a feature of India’s banks before all of the above, and we believe these will remain front and center still.  We include several…

Since India’s demonetization, the government has lowered GDP forecasts, the Reserve Bank of India has signaled a less accommodative stance, and the proposed recapitazliation of ailing public sector banks is being curtailed. Perhaps there will be less flow-through on the budget in execution, timing and magnitude? High non-performing loans and cratering loan growth was a feature of India’s banks before all of the above, and we believe these will remain front and center still.  We include several…

Anecdotes from India Mirror Poor Optimism: Bank Risk Remains

India

UCO Bank provides a full range of banking services throughout India. UCO Bank operates over 1,700 banking branches in India, as well as four branches in overseas locations.

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Uco Bank (UCO IN)

India: Is Banking System 'Out of the Woods' on Bad Loans? 3Q Results of PSU Banks Says Not Yet!

PSU Banks continue to report BAD NEWS on NPAsJust when there were hopes that finally, things may be getting better for Indian Banking System on...

Pankaj Sharma

Indian SOE Banks – Positive/Massive Front-Ended Re-Cap Occurs

* The Indian government removed the biggest tail risk at SOE banks with its first tranche re-cap announcement, enabling the sector to take the...

Thomas J. Monaco

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

India's Lending Is Still Painfully Low in January

The collapse of lending in India remains well in place in January where annual growth is running at an anemic 3.3%. This is the same as in December...

Daniel Tabbush

Anecdotes from India Mirror Poor Optimism: Bank Risk Remains

Since India’s demonetization, the government has lowered GDP forecasts, the Reserve Bank of India has signaled a less accommodative stance, and the...

Daniel Tabbush

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