17.10.2023 : Today's Banking / Financial News at a Glance

?? Bank of Maharashtra Q2 net profit soars 72 per cent to Rs 920 cr : Bank of Maharashtra (BoM) reported a 72 per cent year-on-year (YoY) jump in second quarter net profit at Rs 920 crore, on the back of healthy growth in net interest income and other income, and a sharp decline in tax expenses. The robust growth in bottomline comes despite the Pune-headquartered public sector bank making provisions for standard/ restructured assets amounting to Rs 362 crore.The bank had reported a net profit of Rs 535 crore in the year-ago quarter. Net interest income (difference between interest earned and interest expended) was up 29 per cent YoY at Rs 2,432 crore (Rs 1,887 crore in the year-ago quarter). - Business Line.

?? HDFC Bank posts 51% PAT increase in first quarter post-HDFC merger : HDFC Bank posted a net profit of ?15,976 crore for Q2 FY24, an increase of 50.6 per cent on year on the back of strong growth in net interest income (NII) and better asset quality. The balance sheet of the lender ballooned over the quarter following the merger of erstwhile HDFC with the bank, effective July 1. Due to this and the different accounting principles followed by both entities, the year-ago figures are not entirely comparable. In the post-earnings call, CFO Srinivasan Vaidyanathan said that the merger has been completed, IT systems have been integrated, and branches are operational. The bank is now working to “derive synergistic benefits along with subsidiaries” with the expectation that business momentum will gather pace hereon. - Business Line.

?? HDFC Bank sees 5-10 bps I-CRR impact on net interest margins, says CFO Vaidyanathan : HDFC Bank Chief Financial Officer (CFO) Srinivasan Vaidyanathan on October 16 said that the bank has seen a 5-10 basis points (bps) impact of Incremental Cash Reserve Ratio (I-CRR) on their net interest margins in the July-September quarter. “Impact of I-CRR on NIMs was around 5 to 10 basis points,” Vaidyanathan said during an earnings call.The reported net interest margins (NIM) of the HDFC Bank was at 3.4 percent on total assets in the July-September quarter. Core net interest margins of the bank in the reporting quarter were at 3.65 percent on total assets and 3.85 percent on the interest earnings asset, a press release from the company said. - moneycontrol.

?? Regulatory approvals for HDFC Credila in process, says HDFC CFO : The regulatory approvals for the sale of HDFC Credila, the education loan subsidiary arm of HDFC Bank is in the regulatory process, said S Vaidyanathan, Chief Financial Officer (CFO), HDFC Bank. “The regulatory approvals for the Credila deal and transaction are in the regulatory process,” said Vaidyanathan at the post-results press conference on October 16. Anti-trust regulator Competition Commission of India (CCI) had cleared the purchase of a 90 percent equity stake in HDFC Credila by a private equity consortium of BPEA EQT and ChrysCapital in August 2023. - moneycontrool.

?? IDBI Bank divestment: Indo-Canadian spat may dim Fairfax’s chance : Fairfax India Holdings, the investment arm of Indian-origin Canadian billionaire Prem Watsa, seen as one of the top contenders for IDBI Bank, could now be in the back seat — thanks to the ongoing geopolitical spat between India and Canada. Highly placed sources say with the political tension not easing anytime soon, Fairfax’s is unlikely to be at an advantageous position to secure IDBI Bank in the ongoing divestment process. “If the tension between the two countries escalates or doesn’t end soon, Fairfax may lose its edge in the process,” the source said. If this turns out to be the case, it is understood that Kotak Mahindra Bank and NBD Emirates may have a better chance in succeeding the divestment process for IDBI Bank. In March 2022, businessline reported that Prem Watsa-led Fairfax has shown interest in the bank, and in April 2023, about Kotak Mahindra Bank’s interest. - Business Line

?? Federal Bank Q2 profit jumps 36% at ?954 crore : Federal Bank posted its highest ever quarterly profit of ?954 crore in Q2 FY24, an increase of 35.54 per cent y-o-y on the back of 16.72 per cent growth in net interest income (NII) to a record high of ?2,056.42 crore. In the post-earnings call, MD and CEO Shyam Srinivasan said the bank has seen broad-based growth across loan segments, with the bank posting better performance in Q2 compared with the previous quarter. Net advances grew 19.58 per cent to ?1.9-lakh crore on the back of 18 per cent growth each in retail and business banking loans, 24 per cent in commercial banking loans, and 15 per cent in corporate advances. - Business Line.

?? KVB reports a 51% rise in net profit in Q2; total business crosses ?1.5-lakh crore : Karur Vysya Bank (KVB) maintained strong growth momentum in net profit for the second quarter as the lender saw its total business cross ?150,000 crore for the first time. The bank’s net profit grew 51 per cent to ?378 crore for the quarter ended September 30, compared with ?250 crore in the year-ago period. (In Q1 of this fiscal, the bank reported a 57 per cent rise in its net profit at ?359 crore). The bank’s operating profit grew 11 per cent to ?638 crore from ?572 crore in Q2 of the previous fiscal. - Business Line.

?? Sidbi announces growth accelerator programme for small NBFCs : National development bank Sidbi on Monday announced a growth accelerator programme for small NBFCs to help them become eligible for bank funding. Under the initiative, being carried out in association with the global alliance for mass entrepreneurship and national NBFC lobby FIDC (Finance Industry Development Council), it has onboarded 18 small NBFCs as the first cohort of the programme. The five-month-long programme is designed to scale small NBFCs (Non Banking Financial Company) through design interventions, enabling them to apply for institutional funding based on holistic evaluation parameters, Sidbi chairman & managing director Sivasubramanian Ramann told reporters here. - economic times

?? AU Small Finance Bank unveils ‘Heart to Cart' festival offers with cashback and discounts : AU Small Finance Bank (AU SFB) has introduced a host of festive deals as part of the 'Heart to Cart' Shopping Festival campaign available on AU Credit Cards and Debit Cards. This festive celebration runs from October 15 to November 15 and includes a wide array of prominent merchants across various categories, including mobile phones, electronics, clothing, household appliances, food and groceries, entertainment, travel, health, utilities, furniture and merchant EMIs. AU Small Finance Bank's 'Heart to Cart' Shopping Festival is offering deals during the shopping festivals of major e-retailer platforms. The bank has secured partnerships with more than 30 top-tier brands and the merchant EMI offers are available for over 60 brands and merchants. - moneycontrol.

?? Avoid taking loans from microfinance institutions: Assam CM : Assam Chief Minister Himanta Biswa Sarma made an appeal to the women folk of the state to desist from taking loans from microfinance institutions, stating that the interest rates charged by them are impractically high and it is nearly impossible for the borrowers to repay their loans with that sort of interest rates. Sarma on Monday attended the ceremonial distribution of relief under "Category - III" of the Assam Microfinance Incentive & Relief Scheme (AMFIRS) 2021 for beneficiaries of Dibrugarh district. - economic times.

?? Fitch affirms ICICI Bank, Axis Bank issuer rating : New Delhi: Fitch Ratings on Monday affirmed issuer rating of ICICI Bank and Axis Bank at 'BB+' and said there are expectations of a moderate probability of extraordinary state support compared to large state banks. The outlook on the rating is stable, Fitch said in a statement. Fitch Ratings has affirmed India-based Axis Bank and ICICI Bank's Long-Term Issuer Default Rating (IDR) at 'BB+', the global agency said in two separate rating commentaries. The agency has also affirmed both the bank's Government Support Rating (GSR) at 'BB+' and its Viability Rating (VR) at 'BB'. "Fitch said the long-term IDR of both banks is driven by its GSR. - Economic Times

?? Lenders bank on the festival spirit, offer high savings rates : Banks, especially mid- and small-size private banks and small finance banks (SFBs) have introduced special rates on savings accounts as part of their festival season offers to attract more low-cost deposits. Rates on fixed deposits (FDs) have been elevated for more than a year with SFBs offering up to 9.45-9.50 per cent. Recently, banks have been relying more on bulk deposits to boost their deposit base amid muted retail deposit accretion. To encourage the latter, Bank of Baroda recently introduced four new types of savings accounts, and increased rates on retail term deposits of less than ?2 crore, including NRO and NRE deposits, by up to 50 bps. It also raised rates on bulk deposits of different tenures by around 1 per cent. - Business Line.

?? India Inc raised 54% more resources via bonds in H1 of FY24 : While India Inc. raised 54 per cent more resources via bonds in the first half (H1) of FY24, the momentum could turn sluggish for a couple of months due to tight liquidity in the system and a rise in bond yields, according to Venkatakrishnan Srinivasan, Founder and Managing Partner, Rockfort Fincap LLP. Thereafter, the market is expected to turn buoyant. Corporates, banks, infrastructure investment trusts (InvITs), and real estate investment trusts (REITs), among others, collectively raised ?4,93,191 crore in H1FY24 against ?3,21,070 crore in H1FY23, he said in an interaction with businessline. - Business Line.

?? Avanse Financial Services secures $145 million ECB for education financing : Avanse Financial Services has signed a syndicated social-linked External Commercial Borrowing (ECB) facility of USD 145 million. The education-focused non-banking financial company, in a statement, said it will receive the amount in tranches as per the agreed-upon guidelines. “The funds will be utilised to enable more deserving students to fulfil their academic aspirations...This syndicated social-linked ECB transaction is among the first in the Indian education financing segment,” the company said. - Business Line.

?? RBI imposes monetary penalty on four co-operative banks and one HFC. : The Reserve Bank has imposed monetary penalties on four co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: Gujarat Mercantile Co-operative Bank Ltd, Nagarik Sahakari Bank Ltd, Makarpura Industrial Estate Co-operative Bank Ltd and The Sevalia Urban Co-operative Bank Ltd. The Reserve Bank has imposed a monetary penalty of ?4.50 lakh on Gujarat Mercantile Co-operative Bank Ltd., Ahmedabad, Gujarat for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Maintenance of Cash Reserve Ratio (CRR)’. - Live Mint.

?? HDFC Life share price trades flat post-September numbers; : HDFC Life share price were trading flat on Monday's trading session after the company reported its earnings for the second quarter of FY24. HDFC Life share price today opened at ?632.15 apiece on BSE. The top line of HDFC Life Insurance Company Ltd had a 0.47% growth, and the profit saw a 14.95% YoY gain. The revenue witnessed a 0.87% decrease and the profit saw a 9.24% decrease from the previous quarter. - Live Mint.

?? Sensex sheds 115 pts, Nifty closes below 19,750; Hero MotoCorp, JSW Steel major gainers : Sensex, Nifty updates on 16 October 2023: Benchmark equity indices ended lower on Monday, falling for the third day running, amid weak trends in global markets and spike in Brent crude oil prices due to geopolitical tension in the Middle East. The 30-share BSE Sensex declined 115.81 points or 0.17 per cent to settle at 66,166.93. During the day, it fell 243.36 points or 0.36 per cent to 66,039.38. The Nifty slipped 19.30 points or 0.10 per cent to 19,731.75. - Business Line.

?? Rupee rises 6 paise to 83.24 against US dollar in early trade : The rupee appreciated by 6 paise to 83.24 against the US dollar in early trade on Monday supported by positive macroeconomic data. Forex traders said falling domestic inflation, rise in industrial production figures and improvement in trade deficit aided the local unit. However, geopolitical tensions, particularly the Israel-Hamas conflict, dented investor sentiments. - Business Line.

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