25.01.2024 : Today’s Banking / Financial News at a Glance
🍒 Canara Bank’s net profit up 27.88% to ₹3,738 cr : Canara Bank on Wednesday reported a 27.88 per cent year-on-year increase in its net profit to ₹3,738.26 crore in the third quarter of FY24. It posted a PAT of ₹2,923.16 crore in the same quarter last year. The bank posted net-interest income of ₹9,417 crore, increased by 9.50 per cent y-o-y. Gross non performing assets (NPA) reported at ₹41,776.52 crore in Q3, showing a positive trend with a decrease from ₹44,009.59 crore in the previous quarter. During this quarter, the net non-performing assets (NNPA) was ₹12,183.43 crore, as against ₹15,992.96 crore in the same quarter last year. – Business Line.
🍒 Indian Bank posts 52% rise in Q3 net profit on higher income, lower provision :Public sector lender Indian Bank has reported a massive rise in its net profit for the December 2023 quarter helped by higher income growth and lower provisions amid challenges faced on the margin front. For the quarter ended December 2023, the bank’s net profit grew by 52 per cent to ₹2,119 crore compared with ₹1,396 crore in the year-ago quarter. However, its operating profit stood at ₹4,097 crore against 4,061 crore, on the back of a single-digit rise in net interest income at 5,815 crore (₹5,499 crore). – Business Line
🍒 IOB records double-digit growth in key parameters in Q3, asset quality improves : Indian Overseas Bank (IOB) has exhibited impressive performance across key parameters during the December 2023 quarter. Its net profit, net interest income and advances grew in double digits and its asset quality also exhibited improvements during the period. For the quarter ended December 31, 2023, the Chennai-headquartered PSU lender’s net profit grew by 30 per cent to ₹723 crore compared with ₹555 crore in the year-ago quarter, helped by strong rise in net interest income and lower provisions. Its operating profit rose by 16 per cent at ₹1,780 crore (₹1540 crore in Q3 of FY23) amid about 6 per cent rise in net interest income at ₹2,398 crore (₹2,272 crore). – Business Line.
🍒 Indian Overseas Bank sees 35 bps impact due to RWA norms, says MD and CEO : Indian Overseas Bank (IOB) witnessed an impact of 35 basis points on its non-banking financial companies (NBFC) and consumer credit portfolio due to the recent increase in the risk weight asset (RWA) by the central bank, said AK Srivastava, managing director and chief executive officer at the public sector lender. “We had an impact of 35 bps due to the recent prescription on RWA by the Reserve Bank of India (RBI). The impact was on our NBFC and consumer credit portfolio which is approximately Rs 3500 crore,” Srivastava said in the post-results press conference. – moneycontrol.
🍒 UCO Bank net down 23% at ₹502.83 cr on provisioning towards wage revision : State-run lender UCO Bank on Wednesday reported around 23 per cent year-on-year decline in its net profit at ₹502.83 crore for the third quarter this fiscal due to around ₹277 crore provisioning towards wage revision arrears.The Kolkata-based lender had posted a net profit of ₹652.97 crore in the third quarter last fiscal. The net profit witnessed a 25.18 per cent increase on a quarter-on-quarter basis during the period under review from ₹401.67 crore in the second quarter of this fiscal. The additional provisioning towards wage revision dragged down the bank’s operating profit by 17.34 per cent y-o-y to ₹1,119.14 crore in Q3FY24 from ₹1,353.91 crore in Q3FY23, according to stock exchange filing. – Business Line.
🍒 PNB Housing Finance Q3 earnings: PAT rises 26% on-year to Rs 338 crore : PNB Housing Finance on January 24 reported a 26 percent on-year rise in its net profit to 338.44 crore in the third quarter of the financial year 2023-23. Gross Non-Performing Assets (NPA) is at 1.73 percent as on December 31, 2023 as compared to 4.87 percent in a year ago period and 1.78 percent in a quarter ago period. Retail Gross NPA is 1.67 percent as on December 31, 2023, as compared to 2.86 percent as on December 31, 2022, and 1.74 percent as on September 30, 2023. Corporate Gross NPA is 3.35 percent as on December 31, 2023, as compared to 26.61 percent as on December 31, 2022, and 2.86 percent as on September 30, 2023. – Moneycontrol.
🍒 HDFC Bank reduces stake in CAMS, retains 3.94% ownership : HDFC Bank has divested a 2.01 per cent stake in Computer Age Management Services Limited (CAMS) for all cash consideration of ₹252.34 crore. The Bank sold 9,86,315 shares of CAMS (a 2.01 per cent equity stake) through the secondary market route on BSE & NSE between August 25, 2023, and January 23, 2024, per its regulatory filing. The sale price (average) was ₹2,558.43 per share.After the divestment, HDFC Bank’s shareholding in CAMS is currently 3.94 per cent. “We wish to inform you that out of 29,20,724 equity shares of Rs. 10 each held by erstwhile HDFC Ltd., in CAMS, after the effective date (July 1, 2023) of the merger of HDFC Ltd. with and into HDFC Bank Limited, the Bank sold 9,86,315 shares (representing 2.01% of the share capital of CAMS),” the Bank said. – Business Line.
🍒 HDFC Bank May Sell Assets To Bring Down Costs : Private lender HDFC Bank Ltd. may sell some assets on its loan book to release high cost borrowings, according to people with knowledge of the matter. The lender is keen on bringing down the cost ratio on its balance sheet, while also reducing the credit-deposit ratio, according to the first person quoted above who spoke on the condition of anonymity. Such loans for sale will include those which do not quality for priority sector lending tag, the person said. The bank will continue to originate high-quality loans, but will reserve the right to sell them through the securitisation market. According to the person quoted above, multiple lenders are looking at buying high-quality loans and will be keen on picking up loans from HDFC Bank. – NDTV.
🍒 ICICI Bank plans to moderate hiring growth : ICICI Bank is planning to reduce the pace of its hiring growth in the coming quarters. The second-largest private bank added around 1,700 employees in the third quarter, compared with 10,000 employees in the first half of the current financial year. The lower employee addition has helped the lender cut operating expenses. “On the employee side we have seen over the last couple of years, in the last maybe six quarters, a pretty high growth because of the increase in the team size of the bank. But as you would have seen in this quarter, the net increase has slowed down. Compared to about 10,000 in the first half, we were at about 1,700 in the third quarter,” said Anindya Banerjee, Group Chief Financial Officer, ICICI Bank, in an analyst call. – financial express
🍒 ICICI Bank commands more premium than HDFC Bank : After about 15 years, ICICI Bank has become more valuable than HDFC Bank. As on January 21, the HDFC Bank stock commanded a price/book value (P/BV) multiple of 2.7 times for FY25 while ICICI Bank was trading at a P/BV of 2.8 times. For FY26 too, the P/BV was higher for ICICI Bank at 2.5 versus 2.4 for HDFC Bank. These estimates have been put out by Kotak Institutional Equities. Suresh Ganapathy, who tracks the banking space at Macquarie, wrote early Tuesday that ICICI Bank is at a 15% premium to HDFC Bank. “On a core P/BV, ICICI is at 2.3x FY25E P/BV and HDFC Bank at 2.0x FY25E P/BV,” Ganapathy said. – financial express
🍒 Karnataka Bank posts all-time high profit : The Mangaluru-headquartered Karnataka Bank has posted an all-time high net profit of Rs 1,032.04 crore for the nine months of the financial year ending December 2023, as against Rs 826.49 crore earned during the corresponding period last year. The bank has registered a year-on-year growth of 25 percent during the period. For Q3FY of 2023-24, the bank posted a net profit of Rs 331.08 crore with a growth rate of 10.11 percent as against Rs 300.68 crore during the corresponding period previous year, a bank release said. The meeting of the board of directors held on Tuesday at Mangaluru approved the financial results for the quarter and nine months period ended December 31, 2023. – economic times.
🍒 Ujjivan Small Finance Bank’s Q3 net profit up 2.34% to ₹300 crore : Ujjivan Small Finance Bank reported a profit of ₹300 crore for the quarter ended December 2023, marking a y-o-y increase of 2.34 per cent compared to ₹293 crore for the same quarter last year. The bank’s operating profit grew by 17.5 per cent to ₹45,730 crore from ₹38,892 crore in the Q3 pervious year. On a sequential basis, net profit has decreased by 8 per cent from ₹32,774 to ₹30,006. Operating profit has also decreased by 5 per cent from ₹48,336 in Q2 to ₹45,730 in Q3. – Business Line
🍒 DBS will anchor PCBL’s Rs 700-crore issue to finance Aquapharm buy : PCBL Ltd, formerly known as Philips Carbon Black Ltd, is raising funds from DBS Bank to part-finance its proposed acquisition of Aquapharm Chemicals, said people with knowledge of the matter. The Singapore-based bank has committed Rs 210 crore and will be the anchor investor in PCBL’s Rs 700 crore proposed bond issue, the people cited above said. Stock exchange-listed PCBL Ltd announced the acquisition of Aquapharm Chemicals Pvt Ltd last November for Rs 3,800 crore. It informed the exchanges that the acquisition would be done through a wholly owned subsidiary company, Advaya Chemicals Industries Ltd, which was incorporated on January 11.
🍒 RRB consolidation after FY-end review : The government may consider further consolidation in regional rural banks, or RRBs, after reviewing their performance against the targets fixed under the Sustainable Viability Plan (SVP) set for each lender. “An assessment will be carried out at the end of the financial year, and based on that, we will draw a roadmap, if there is a need for further consolidation,” said a government official aware of the matter. The government expects consolidation to further drive business diversification and cost rationalisation and help these regional lenders compete with other commercial lenders including small finance banks. “The idea is that consolidation should ensure better NPA management, technology adoption, corporate governance, and HR development in RRBs,” said the official cited above. – economic times
🍒 Bankruptcy court admits insolvency resolution plea against Helios Photo Voltaic : The principal bench of the National Company Law Tribunal (NCLT) has admitted an application filed by the National Asset Reconstruction Company (NARCL) against Helios Photo Voltaic Ltd, earlier known as Moser Baer Photo. Originally, public sector lender Oriental Bank of Commerce (now merged with the Punjab National Bank) had approached the tribunal after the company defaulted on its dues of Rs 859 crore. Subsequently, those loans were assigned to the state-sponsored bad bank, NARCL. – economic times
🍒 Bank credit expansion projected at 15% in FY24, 12% in FY25: Icra : Rating agency Icra on Wednesday revised upward its bank credit growth projection at 14.9-15.3 per cent this fiscal, but said the same will lose steam and grow at 12 per cent next fiscal. At 14.9-15.3 per cent, the system level credit expansion in absolute terms will be Rs 20.4-20.9 lakh crore, it said, adding this will be the highest ever incremental bank credit growth and would surpass the previous high of Rs 18.2 lakh crore recorded in FY23 at a growth rate of 15.4 per cent. The agency had earlier estimated a 12.8-13 per cent credit demand for this fiscal. – economic times
🍒 RBI deputy governor calls for strengthening governance at UCBs : Reserve Bank Deputy Governor Swaminathan J underscored the need to strengthen governance and technology infrastructure in uban cooperative banks (UCBs) given their role in furthering financial inclusion at a meeting with south-based UCBs In his keynote address. deputy governor Swaminathan J, highlighted the pivotal role UCBs play in furthering financial inclusion. He also underscored the importance of proactive measures to uphold the resilience of the UCB sector, according to a news release by the Reserve Bank of India. – economic times.
🍒 L&T Finance Holdings consolidated PAT rises 41% : The consolidated net profit of L&T Finance Holdings rose 41% year-on-year (y-o-y) in the October-December quarter owing to a growth in retail loans. The company posted a bottom line of Rs 640 crore for the quarter under review. It had posted a net profit of Rs 595 crore in the July-September period. In line with the company’s retail focus, the retail book grew 31% y-o-y to Rs 74,759 crore as on December 31. Retail disbursements rose 25% y-o-y to Rs 14,531 crore in the December quarter. The retail book includes personal loans, home loans, loan against property and two-wheeler finance. – financial express
🍒 IDFC First Bank MD sees CD ratio below 100 per cent in FY25 : Private sector lender IDFC First Bank will lower its credit-deposit ratio (CD) to below 100% in Q4FY24 and continue to moderate it further in FY25, down from 101.4% in Q3FY23, according to MD & CEO V. Vaidyanathan. His views are significant because the Reserve Bank of India (RBI) has reportedly asked lenders to raise their CD ratio to an “ideal” level of 70%-80%. Speaking to FE, Vaidyanathan said: “We maintain a liquidity coverage ratio of 121% and are also funded by legacy bonds and other borrowings to the tune of Rs 30,000 crore, so our strategy is as and when these bonds mature, we will mature them with deposits. So this (CD ratio) will get automatically addressed. It should also be noted that at the time of the merger, our CD ratio was 136%, we have brought it down to 101.4% and by March we will come below 100% and it will keep coming down in FY25.” – financial express
🍒 MFIs will continue to face perception challenges: Muthoot Microfin CEO : The microfinance industry will continue to battle the misperception regarding the sustainability of their businesses, Muthoot Microfin chief executive officer Sadaf Sayeed said on Tuesday. A key reason for this skepticism around microfinance companies stems from the fact that the segment is prone to event risks, he feels. “During our IPO journey, this was the risk that we battled the most. Everybody said while you have a great business, there is an event risk. What will you do about it,” he said at the Sa-Dhan microfinance institutions confluence. – financial express
🍒 Banking tech firms capitalise on lenders’ digital push : Banking technology companies have witnessed a strong demand for their services as banks look to increase the pace of technology adoption. In a bid to minimise costs, banks have opted to outsource certain key functions to these service providers instead of rebuilding their own tech infrastructure, say experts. “Obviously, the need for technology and digitisation has grown. While banks tried to do everything in-house, it has not completely worked out. After COVID, banks have realised that digitisation is imperative,” said Rohit Arora, chief executive officer and co-founder, Biz2X. He added that with the entry of platforms like Unified Payments Interface, customer exposure to digital channels has significantly improved and banks are keen to integrate various technology solutions to cater to these customers. – financial express
🍒 Liquidity deficit in banks widens to Rs 3.3 trn due to GST outflows : The deficit liquidity in the banking system widened to Rs 3.33 trillion on Tuesday, mainly due to outflows related to Goods and Services Tax (GST). The liquidity was in a deficit of Rs 2.72 trillion on Monday. Consequently, the cut-off yields on the Treasury bills at auction on Wednesday were set higher than the previous week. The Reserve Bank of India set the cut-off yield on the 91-day, 182-day, and 364-day T-bills at 7.02 per cent, 7.19 per cent, and 7.17 per cent, respectively. The cut-off yield on the 91-day bill was set 5 basis points higher, whereas that on the 182-day and 364-day cut-off yield was set 2 basis points higher than the last week. – Business Standard
🍒 CMS Info Systems reports 14% increase in Q3 FY24 consolidated net profit at ₹87 crore : CMS Info Systems Ltd reported a 14 per cent increase in third quarter consolidated net profit at ₹87 crore against ₹76 crore in the year ago quarter. The company’s Board of Directors declared an interim dividend of ₹2.50 per equity share of face value of ₹10 each fully paid up. Revenue from operations (cash management services, managed services, and card services) was up 19 per cent y-o-y at ₹582 crore (₹488 crore in the year ago quarter). Total income, including revenue from operations and other income, was up 20 per cent at ₹590 crore (₹493 crore). – Business Line
🍒 Widening liquidity deficit: RBI to infuse ₹2.50 lakh cr liquidity via VRR : The Reserve Bank of India (RBI) will infuse liquidity amounting to ₹2.50-lakh crore via a 15-day variable rate repo (VRR) auction on Thursday as the overall liquidity deficit in the banking system has widened to ₹3.34-lakh crore on January 23 as compared with ₹1.29-lakh crore as on January 1st. This comes even as the huge cash balances built up by the Centre with RBI on account of inflows from GST and advance remain unspent, say market experts. Overall liquidity in the banking system includes VRR auctions, liquidity drawn from the marginal standing facility, surplus funds parked at the standing deposit facility, and liquidity infused by the RBI via various long-term repo operations during the Covid-19 period (2021). – Business Line.
🍒 Muthoot Capital Services nine-month profit at ₹110.97 crore : Muthoot Capital Services Ltd (MCSL) posted a net profit of ₹10.26 crore in the third quarter of FY24, compared to ₹19.66 crore in Q3 of FY23. Net profit for the nine-month period ended December 31, 2023, increased 110 per cent to ₹110.97 crore, as against ₹52.72 crore in the same period last year. The company disbursed loans amounting to ₹479 crore during the quarter. The total AUM (Assets under Management) reached ₹1,944 crore at the end of the quarter. Thomas George Muthoot, Managing Director, Muthoot Capital Services Ltdsaid, “We put up a strong performance in Q3, with disbursements crossing pre-Covid levels. We are focussed on digitisation, operational efficiency, and customer delight as cornerstones to our success. The Q3 results are a testimony to the dedication and hard work of our talented team, who have remained steadfast in our mission to deliver value and excellence in all aspects of business”. – Business Line.
🍒 SK Finance raises ₹1,328 crore via equity issuance : SK Finance, a non-banking finance corporation (NBFC) focused on vehicle financing and secured business loans, has raised ₹1,328 crore through equity issuance. The existing investors who had made fresh investment include Norwest Venture Partners, TPG Growth and Baring Private Equity India. New investors who had participated in this round include Duro Capital, Axis Alternatives, Ananta Capital and Mirae Asset Venture Investments. – Business Line.
🍒 U GRO Capital’s Q3 net profit up 148% at ₹32.5 crore : U GRO Capital, a non-bank finance company, reported a net profit of ₹32.5 crore for the third quarter ended December 31, 2023. This latest bottom line was up 148 per cent on a year-on-year basis. On a sequential basis, the net profit in the third quarter of this fiscal was up by 13 per cent compared to the net profit of ₹28.9 crore recorded in the second quarter. The total income was up by 10 per cent sequentially, reaching ₹279.3 crore (₹253.6 crore). For the nine months ended December 31, 2023, the net profit stood at ₹86.7 crore, showing a 237 per cent increase over the net profit of ₹25.7 crore in the same period last fiscal. – Business LIne.
🍒 Rupee ends slightly higher, aided by yuan’s uptick, dollar’s slip : The rupee ended marginally higher on Wednesday, aided by a slight uptick in the offshore Chinese yuan and a pullback in the dollar index. The rupee ended at 83.1225 against the US dollar, compared with its close at 83.15 in the previous session. The dollar index was down 0.4 per cent at 103.07, while most Asian currencies weakened. The offshore Chinese yuan was up 0.1 per cent after the country’s central bank said it would cut the amount of cash that banks must hold as reserves to shore up the economy. – Business Line.
🍒 Sensex closes over 650 pts higher; Nifty above 21,450; Media stocks shine : Sensex, Nifty updates on 24 January 2024: India’s equity markets are volatile on Wednesday. The BSE Sensex rose 689.75 pts or 0.98% to close at 71,060.31. The NSE Nifty jumped 215.15 pts or 1.01% to close at 21,453.95. Analysts anticipated sustained selling pressure from foreign portfolio investors, emphasizing the significance of upcoming results and heightened volatility during the monthly F&O settlement. Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, highlighted caution in global sentiments due to Fitch Group’s warning about the impact on South Asian economies and increased hostilities in the Red Sea. Technical analyst Pravesh Gour noted Nifty’s breakdown, signalling potential testing at 50-DMA at 21000, while Bank Nifty faces hurdles and support challenges. – Business Line..
🙏
