Tuesday 27 October 2020

27.10.2020: Today's Banking / Financial News

27.10.2020: Today's Banking / Financial News at a Glance

🍒 SBI raises Rs 5,000 cr by issuing Basel-III compliant bonds : The State Bank of India (SBI) on Monday said it has raised Rs 5,000 crore by issuing Basel-III compliant bonds. The committee of directors of capital raising met on Monday and accorded its approval to allot 50,000 Basel-III compliant non-convertible, taxable debt instruments, SBI said in a regulatory filing. The debentures qualifying as tier II capital of the bank of face value of Rs 10 lakh each, at par, bearing a coupon of 5.83 per cent aggregating to Rs 5,000 crore were allotted to bond subscribers on October 26, 2020, it said. - financial express

🍒 IDBI Bank Consolidated September 2020 Net Interest Income (NII) at Rs 1,703.20 crore, up 3.85% Y-o-Y : Net Interest Income (NII) at Rs 1,703.20 crore in September 2020 up 3.85% from Rs. 1640.1 crore in September 2019. Quarterly Net Profit at Rs. 332.63 crore in September 2020 up 109.64% from Rs. 3,448.88 crore in September 2019. Operating Profit stands at Rs. 1,269.00 crore in September 2020 up 23.07% from Rs. 1,031.10 crore in September 2019. IDBI Bank EPS has increased to Rs. 0.32 in September 2020 from Rs. 4.46 in September 2019. IDBI Bank shares closed at 39.75 on October 23, 2020 (NSE) and has given 89.29% returns over the last 6 months and 28.64% over the last 12 months. - Moneycontrol.

🍒 Indian Bank Standalone September 2020 Net Interest Income (NII) at Rs 4,144.04 crore, up 122.43% Y-o-Y : Net Interest Income (NII) at Rs 4,144.04 crore in September 2020 up 122.43% from Rs. 1863.0391 crore in September 2019. Quarterly Net Profit at Rs. 412.28 crore in September 2020 up 14.98% from Rs. 358.56 crore in September 2019. Operating Profit stands at Rs. 2,994.95 crore in September 2020 up 99.43% from Rs. 1,501.77 crore in September 2019.Indian Bank EPS has decreased to Rs. 3.65 in September 2020 from Rs. 7.29 in September 2019. Indian Bank shares closed at 61.25 on October 23, 2020 (NSE) and has given 25.64% returns over the last 6 months and -51.52% over the last 12 months. - Moneycontrol.

🍒 UCO Bank Standalone September 2020 Net Interest Income (NII) at Rs 1,393.15 crore, up 10.03% Y-o-Y : Net Interest Income (NII) at Rs 1,393.15 crore in September 2020 up 10.03% from Rs. 1266.21 crore in September 2019. Quarterly Net Profit at Rs. 30.12 crore in September 2020 up 103.38% from Rs. 891.98 crore in September 2019. Operating Profit stands at Rs. 1,330.32 crore in September 2020 up 10.21% from Rs. 1,207.04 crore in September 2019. UCO Bank EPS has increased to Rs. 0.03 in September 2020 from Rs. 1.21 in September 2019. UCO Bank shares closed at 12.55 on October 23, 2020 (NSE) and has given 3.29% returns over the last 6 months and 6.36% over the last 12 months. - Moneycontrol.

🍒 Yes Bank Standalone September 2020 Net Interest Income (NII) at Rs 1,973.37 crore, down 9.72% Y-o-Y : Net Interest Income (NII) at Rs 1,973.37 crore in September 2020 down 9.72% from Rs. 2185.91 crore in September 2019. Quarterly Net Profit at Rs. 129.37 crore in September 2020 up 121.56% from Rs. 600.08 crore in September 2019. Operating Profit stands at Rs. 1,360.03 crore in September 2020 down 6.75% from Rs. 1,458.44 crore in September 2019. Yes Bank EPS has increased to Rs. 0.06 in September 2020 from Rs. 2.46 in September 2019. Yes Bank shares closed at 13.30 on October 23, 2020 (NSE) and has given -50.83% returns over the last 6 months and -75.71% over the last 12 months. - Moneycontrol.

🍒 Rs 3,600 crore recovered from Vijay Mallya, SBI-led consortium of banks tells Supreme Court : The State Bank of India (SBI)-led consortium of banks told the Supreme Court on October 26 that around Rs 3,600 crore had been recovered from fugitive businessman Vijay Mallya so far. Senior Advocate Mukul Rohatgi, representing the SBI-led banks consortium, also informed the apex court that Rs 11,000 crore were still needed to be recovered from Mallya, The Times of India reported. The top court dismissed a petition filed by Mallya's United Breweries Holdings Limited (UBHL) challenging a Karnataka High Court order upholding the closing of the company for recovery of dues payable by Kingfisher Airlines Ltd, news reports suggest.- Moneycontrol.

🍒 Interest waiver to be credited by 5 Nov : Lenders will have to pay up by 5 November the interest on interest charged on loans of up to ₹2 crore for the six-month repayment moratorium period, the government said, 10 days after being pulled up by the Supreme Court. The finance ministry announced the waiver on interest on interest on Saturday, along with details of implementation. To be sure, borrowers will still have to pay the simple interest on their loans. The scheme for “grant of ex-gratia payment" is applicable for the six-month period of 1 March to 31 August. The money will be routed through lending institutions, the ministry said in a circular for banks and other lending institutions. The lender has to credit the amount to the borrower’s account before 5 November, the deadline set by the Supreme Court for giving relief to consumers ahead of Diwali. Thereafter, lenders will have to claim reimbursement from the government by 15 December. - Live Mint

🍒 75% of borrowers to benefit from interest waiver: Crisil : Over 40 per cent of system credit and 75 per cent of borrowers will benefit from interest-on-interest concession under the recently announced government scheme, according to Crisil Ratings. This will cost the exchequer about ₹7,500 crore. The cost to exchequer would have halved if waiver was allowed only where moratorium was availed of, as per the credit rating agency’s analysis. “From a borrower’s perspective, the benefit would be relatively higher for those who had availed of higher-yielding loans. “Consequently, borrowers of unsecured, micro and gold loans will benefit more than those who had taken home loans,” the credit rating agency said. - Business Line

🍒 Yes Bank to trim branches, ATMs and office spaces to lower costs : Yes Bank has chalked out a plan to close non-performing branches and ATMs, reduce office space by moving to a revolving desk layout and renegotiate contracts with vendors, landlords and contractors, as it seeks to cut costs and save up to Rs 600 crore this year. The cost savings will directly go into the bank's bottom line and make profit more sustainable, chief executive Prashant Kumar told ET in an interview. In the quarter ended September, the bank converted 35 rural branches into low-cost business correspondent centres which together with other measures like digitisation and renegotiating contracts with vendors helped in reducing total operating expenses by 21%, contributing to its profit. Kumar said such measures will continue. - economic times

🍒 RBI encourages investment in sovereign bonds as part of liquidity measures : The Reserve Bank of India is making longer-tenor sovereign bonds attractive again. Quantum Mutual Fund has moved to the 10-14 year segment after staying in duration of up to three years in August in its 691 million rupees ($9.4 million) Dynamic Bond Fund. UTI Asset Management Co. has turned overweight on bonds maturing in up to 15 years, after cutting duration two months ago. The strategy change was prompted by a series of liquidity measures announced by the Reserve Bank of India earlier this month, including doubling the size of open market operations. That’s spurred expectations that the central bank would intervene regularly to keep yields anchored. Confidence over RBI support has even outweighed concern over the government’s plan to increase debt sales. - Business Standard.

🍒 RBI's debt restructuring scheme sees few takers in corporate world: Banks : The Reserve Bank of India’s (RBI’s) loan restructuring scheme for Covid-19-affected borrowers has seen few takers in the corporate world so far, according to bank executives who have seen very little interest in it from their corporate accounts. Under the scheme, borrowers’ accounts will not be downgraded as sub-standard or ‘non-performing’ if their loans are restructured. Rather, they will retain their ‘standard’ status. But the fear of a negative impact on their credit rating is holding companies back. “There is not much interest among corporates to go for restructuring since the biggest fear is the impact of credit ratings on firms. We have received only four to five enquiries, which haven’t been confirmed, for accounts with exposure in the range of Rs 100-1,000 crore,” said the managing director (MD) and chief executive officer (CEO) of a large state-owned bank. - Business standard

🍒 Kotak Mahindra Bank Q2 profit up 27% : Private sector lender Kotak Mahindra Bank reported a 26.7 per cent increase in standalone net profit to ₹2,184.84 crore from ₹1,724.48 crore in the second quarter this fiscal, led by a sharp rise in its income and lower provisions. Total income increased by 3.8 per cent to ₹8,288.08 crore in the July to September 2020 quarter from ₹7.986.01 crore a year ago. Net interest income for the quarter ended September 30, 2020, increased 17 per cent to ₹3,913 crore from ₹3,350 crore a year ago. Net interest margin for the second quarter was at 4.52 per cent. Other income shot up by 18.6 per cent to ₹1,452.03 crore in the quarter under review. - Business Line

🍒 Sashidhar Jagdishan to take charge as MD & CEO of HDFC Bank : HDFC Bank, the country’s largest private sector lender, will have a new chief from October 27 when Sashidhar Jagdishan takes charge as Managing Director and CEO. “Aditya Puri has retired as the Managing Director of the bank at the end of business hours on October 26 upon reaching 70 years of age, in accordance with the tenure approved by the Reserve Bank of India,” the lender said in a regulatory filing, adding that the board places on record its deep and sincere appreciation for the exceptional contribution made by Puri. Puri was the bank’s MD since its inception in 1994. Jagdishan too joined HDFC Bank in 1996. - Business Line

🍒 PNB scam case: UK court rejects Nirav Modi’s latest bail attempt : A UK court on Monday rejected the latest bail plea of fugitive diamond merchant Nirav Modi, who has been lodged in a London prison since his arrest on an extradition warrant in March last year. The application was reportedly made on the basis of “new evidence”, but the Westminster Magistrates’ Court District Judge Samuel Goozee was not convinced to reverse previous bail rejections in Modi’s case. The 49-year-old jeweller, fighting extradition to India on charges of fraud and money laundering in the estimated $2-billion Punjab National Bank (PNB) scam case, has made around six previous attempts at bail — at the magistrates’ court as well as at the High Court level.- Business Line

🍒 SBI Life Q2 net profit rises to ₹300 crore : SBI Life Insurance net profit more than doubled to ₹299.73 crore in the second quarter of the fiscal from ₹129.84 crore a year ago. The private sector life insurer registered a robust 27.2 per cent in net premium income to ₹12,857.95 crore for the quarter ended September 30, 2020, from ₹10,111.51 crore in the same period last fiscal. In statement on Monday, SBI Life Insurance said its new business premium has increased by 15 per cent to ₹9,000 crore from ₹7,820 crore in the first half of the fiscal year 2020-21. - Business Line

🍒 Mahindra Finance Q2 net profit up 34% : Mahindra and Mahindra Financial Services reported a 33.7 per cent increase in consolidated net profit at ₹352.5 crore in the second quarter of the fiscal against ₹263.6 crore a year ago. Its total income increased by 4.6 per cent to ₹3,070.5 crore in the quarter ended September 30, 2020, against ₹2,936.48 crore during the corresponding quarter of last year. In a statement on Monday, Mahindra Finance said it has considered an additional charge of ₹433 crore during the second quarter this fiscal and ₹910 crore in the first half of the fiscal due to a management overlay, to reflect deterioration in the macroeconomic outlook. “As of September 30,2020, the cumulative amount of management overlay provisions stood at ₹1,484 crore,” it said. - Business Line

🍒 Small HFCs may be unable to comply with RBI’s minimum fund norms: Report : The top 20 or so housing finance companies (HFCs), which hold over 70 per cent of the market share, already comply with the minimum net owned fund (NOF) requirement of ₹20 crore prescribed by the Reserve Bank of India (RBI) in its revised regulatory framework for HFCs. However, smaller HFCs may face issues while raising the capital and may choose to be reclassified in other categories of NBFCs (non-banking finance companies) or exit the segment, CARE Ratings said in a report. Currently, around 100 HFCs are registered with the National Housing Bank (NHB). - Business Line

🍒 DHFL lenders set October 30 deadline for revised offers, flay Wadhawan : Lenders of Dewan Housing Finance (DHFL) have asked for revised offers with no “conditional plans” from the four existing bidders, who will have to submit the new plans to own the troubled non-banking finance company and its different assets by Friday evening, a new deadline set. The committee of creditors (CoC) met Monday analysing the bids it had received from Oaktree, SC Lowy, Adani Capital and Piramal Group. It will likely meet on Saturday to take a call on revised bids, three people with knowledge of the matter told ET. Lenders are in favour of negotiating hard with bidders as they aim to maximise value of assets. - economic times

🍒 Customer spending getting back to pre-COVID levels: AU Small Finance Bank : AU Small Finance Bank on Monday said customer spending is getting back to pre-COVID levels and its festive season offer has witnessed 23 per cent rise in per day debit card spends. The 'AU Shopping Dhamaka' was launched on September 21 and will go on till November 22. AU Small Finance Bank is experiencing an increase of 23 per cent in per day debit card spends. Overall, point-of-sale (PoS) and e-commerce transactions witnessed a surge of 16 per cent since the launch of the festive offers, it said in a release. The bank is already witnessing a bounce back in spending to pre-COVID levels, it added. - economic times

🍒 Kotak Mahindra denies takeover talks with IndusInd, but says its open for M&A opportunities : Kotak Mahindra Bank on Monday denied takeover talks with IndusInd Bank but said they were open to M&A opportunities. News agency Bloomberg had reported that Kotak Mahindra Bank is exploring a takeover of smaller rival IndusInd Bank to create the nation’s eighth-largest financial firm by assets. “Not saying no to any of those growth avenues but certainly not on this one,” said Jaimin Bhatt, group CFO, Kotak Mahindra Bank. “When we raised capital in the first quarter of this year, we did talk about the fact that we will look at acquisitions, whether it is companies or assets.” The bank which raised more than Rs 7500 crore through a QIP route in May this year said it has enough capital cushion to explore inorganic opportunities. “Right now, that is cushion of capital. We will have to get into, whether it is right opportunities, whether it is growing on the organic track,” Bhatt added. “As we see green-shoots coming in, we will be open to growing advances book also. We have all the building blocks ready to be growing. Having capital is cushion but we will use it judiciously.” - economic times

🍒 IndusInd Bank denies takeover talks with Kotak Mahindra Bank : Private lender IndusInd Bank denied having any exploratory takeover talks with peer Kotak Mahindra Bank and said the former has unstinted support from its promoters, the Hinduja family. Earlier in the day news agency Bloomberg had reported that Kotak Mahindra Bank is exploring a takeover of smaller rival IndusInd Bank to create the nation’s eighth-largest financial firm by assets. “IndusInd Bank categorically denies any such developments, its malicious and incorrect,” the bank said in an email response. “The Promoter of IndusInd Bank, IndusInd International Holdings Limited (IIHL), reiterate their full support to the IndusInd Bank, now and always.” - economic times

🍒 Rival ICICI Bank expresses gratitude towards Aditya Puri for his contribution to banking : Showing its gratitude towards one of the doyens of India's banking industry, rival ICICI Bank thanked Aditya Puri, the outgoing HDFC Bank boss, for his contribution towards the sector. In a tweet, the ICICI Bank said, " #ICICIBank thanks you, Mr. Aditya Puri, for your contribution to the Indian banking industry. Throughout your illustrious career spanning decades, you have been an inspiration to many. We wish you the very best for your future endeavours." HDFC has named Sashidhar Jagdishan as the next CEO who will replace Aditya Puri who is set to retire today after a glorious 25 years at the helm. Jagdishan will assume the position of the CEO from tomorrow. - economic times

🍒 Gold loan company Muthoot Finance to raise upto Rs 2,000 cr via debentures : Gold loan company Muthoot Finance Ltd plans to raise upto Rs 2,000 crore through public offering of Secured Redeemable Non-Convertible Debentures (NCDs) to deploy funds in lending business.

🍒 The proposed debenture issue will have a base issue size of Rs 100 crore with an option to retain oversubscription upto Rs 1,900 crores aggregating upto tranche limit of Rs 2,000 crore. The issue opens on October 27, 2020 and closes on November 20, 2020 with an option to close at an early date or extend the date to be decided by the Board of Directors or NCD committee. The Secured NCDs proposed to be issued under this Issue have been rated “AA” by CRISIL and “AA” by ICRA. These ratings indicate “high degree of safety regarding timely servicing of financial obligations”. - Business Stnadard

🍒 SAT clearing more cases now than before Covid-19 pandemic, shows data : The Securities Appellate Tribunal (SAT), which hears appeals against decisions by major financial regulators, had 560 pending appeals as of September end, according to information obtained by Business Standard through an application filed under the Right to Information Act. Additional data shared by the tribunal showed that this is largely because of appeals filed in the past two months. August and September each saw over 80 appeals to the SAT. However, the disposal of cases by the tribunal has also gone up over the past two months, owing to the multiple steps it has taken to ease the caseload amidst the Covid-19 pandemic. - Business Standard

🍒 Oaktree, Piramal ahead in race to acquire DHFL : US-based Oaktree Capital and Piramal Enterprise are ahead in the race to acquire the stressed DHFL. According to documents reviewed by BusinessLine, Oaktree has made an offer for the entire portfolio at about ₹28,103 crore. It will pay ₹10,357 crore as upfront cash recovery amount to settle the admitted financial creditor claims through existing cash and cash equivalent available with the corporate debtor and infusion of fresh equity or debt. Additionally, it will issue ₹15,800 crore to the financial creditors as non-convertible debentures with a quarterly coupon of 6.5 per cent with a seven-year tenure. It has also proposed to pay towards admitted employee claims. - Business Line

🍒 Gold rates flat at Rs 51,238 per 10 gm; price could reach Rs 67,000 in next 12 months, says Motilal Oswal : Gold prices were steady at Rs 51,238 per 10 gram in the Mumbai retail market on a weaker rupee and muted global cues. The precious metal had gained 0.62 percent last week in the domestic market. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,934 plus 3 percent GST, while 24-carat 10 gram was Rs 51,238 plus GST. The 18-carat gold quoted at Rs 38,429 plus GST in the retail market. Silver prices dropped by Rs 839 to Rs 61,706 per kg from its closing on October 23.

🍒 Rupee settles 23 paise lower at 73.84 against US dollar : The rupee depreciated 23 paise and settled at 73.84 (provisional) against the US dollar on Monday as muted domestic equities and strong American currency weighed on investor sentiment. The local unit opened at 73.77 at the interbank forex market, then lost further ground and finally settled at 73.84 against the greenback, registering a decline of 23 paise over its previous closing price of 73.61.

🍒 Sensex, Nifty drop 1.35%; Metals, Auto stocks fall sharply : The Sensex ended at 40,145.50, down by 540.00 points, or 1.33%, from its previous close of 40,685.50. Similary, the NSE Nifty has lost 177.70 points or 1.36 per cent to 11,767.75. Among the major losers which pulled the markets down were Bajaj Auto, Tata Steel, Reliance, Bajaj Finance, Asian Paint, M&M, ICICI Bank, HDFC Bank and Kotak Bank and Tech Mahindra. Stocks that bucked the weak market were IndusInd Bank, Nestle, Kotak Mahindra Bank, PowerGrid, TCS, L&T and Hindustan Unilever

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