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Tag: money and banking

  • Bank of Maharashtra reports 47% jump in Q1FY25 net profit

    Bank of Maharashtra reports 47% jump in Q1FY25 net profit

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    Bank of Maharashtra (BoM) reported a 47 per cent jump in first quarter net profit at ₹1,293 crore on the back of healthy growth in net interest income and non-interest income and sharp decline in provision for taxes.

    The Pune-headquartered public sector bank had reported a net profit of ₹882 crore in the year ago period.

    Net interest income (difference between interest earned and interest expended) in the reporting quarter was up about 20 per cent yoy at ₹2,799 crore (₹2,340 crore in the year ago period).

    Other income, including fee-based income, treasury income and recovery in written-off accounts, rose 42 per cent yoy to ₹894 crore (₹629 crore).

    Provision for Non Performing Assets (NPAs) and Standard/Restructured Assets were up at ₹586 crore (₹539 crore) and ₹344 crore (₹212 crore), respectively. Provision for taxes declined to ₹50 crore (₹205 crore).

    Net interest margin (yearly) rose to 3.97 per cent against 3.86 per cent in the year ago period.

    GNPAs position improved to 1.85 per cent of gross advances as at June-end 2024 against 1.88 per cent as at March-end 2024. Net NPAs position was unchanged at 0.20 per cent of net advances.

    Gross advances increased by 18.99 per cent yoy to ₹2,09,031 crore as at June-end 2024 on the back of 24.70 per cent growth in RAM (retail, agriculture and MSME) advances and 11.01 per cent growth in corporate & other advances.

    Total deposits rose by 9.43 per cent yoy to stand at ₹2,67,416 crore as at June-end 2024. Low-cost CASA (current account, savings account) deposits declined to 49.86 per cent of total deposits against 50.97 per cent in the year ago quarter.

    Shares of the Bank closed at ₹68.75 per share, up 5.67 per cent over the previous close.

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  • Credit growth in India expected to exceed nominal GDP this fiscal: SBI Capital Markets

    Credit growth in India expected to exceed nominal GDP this fiscal: SBI Capital Markets

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    Credit growth in the Indian banking sector is expected to exceed nominal GDP growth in the current financial year 2024-25, growing at 13-15 per cent, according to SBI Capital Markets.

    Nominal gross domestic product (GDP) is growth, without adjustment for inflation. The growth according to the report would be amplified by long-term drivers such as buoyant economic growth, accompanied by formalisation, digitalisation, and premiumisation.

    Higher capacity utilization across sectors leading to capex, pick-up in MSME credit, and increased infrastructure and construction activity are expected to boost the industry segment, potentially achieving high single-digit growth in 2024-25, surpassing 2023-24’s performance SBI Capital Markets, incorporated in 1986 as a wholly owned subsidiary of the State Bank of India, is one of the oldest investment banks in India.

    “While PSBs (public sector banks) continue to lose share to PVBs (private sector banks), the pace has come down to a trickle as the former are now armed with well-capitalized balance sheets, and a war chest of deposits,” said the report released by SBI Capital Markets earlier this week.

    Terming banks as the beating heart of the Indian economy, the report said they are seeing excellent blood flow — record high profits and superlative credit growth. “With the blocks of bad assets cleared, asset quality and capital are in the pink of health.

    The question arises – will credit growth continue amidst countercyclical operations by RBI, or will there be a shortage of the lifeblood – deposits? Will vitals (asset quality, capital) remain stable, and can the profit pulse race further up?” SBI Capital Markets analysed some of these aspects in the report.

    Industry credit has grown at a CAGR (compound annual growth rate) of 5 per cent in the past five fiscals, slower than overall bank credit of CAGR 10 per cent. Interestingly, NBFC credit growth continues to outpace bank credit growth.

    The slow credit growth, it said, is as large private corporates are eschewing bank credit – their capex is being funded by copious profits, capital markets attracted by their healthier books, and through financial tie-ups with global capital-rich partners.

    “Infrastructure projects are increasingly funded by key financial institutions in early stages and capital markets (bonds, InvITs) for operational projects. Government capex is primarily funded by Budgetary allocations with some MLI assistance. These factors have limited the growth of bank infrastructure loans to a per cent 5 per cent CAGR in recent years.

    Proposed project loan provisions may extend this period of moderate growth,” it said. These developments have prompted the regulator to take countercyclical measures and boost risk weights for certain categories of credit within personal loans as well as loans extended to (and by) NBFCs.

    This could have a minor impact on capital ratios, and growth in these segments tapered down slightly in the second half of 2023-24.

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  • Rule changes can help onboard customers from anywhere in India: Deutsche Bank

    Rule changes can help onboard customers from anywhere in India: Deutsche Bank

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    German lender Deutsche Bank will be focussing on the digital channel over the branch model to grow its business in the country, a top official said.

    Changes in rules by the RBI mandating geographical location restrictions while onboarding customers will be of help, Kaushik Shaparia, chief executive of Deutsche Bank Group, India, told PTI.

    “If the regulator were to permit digital access over and above the geographical restrictions, I am convinced we can do more.

    “Currently, there are restrictions as to where you can onboard clients, where your locations are, and the customer has to have an office near one of your locations etc,” he said on the sidelines of a bank event here.

    When asked about the branch strategy in the country, Shaparia quipped that “geography is history”, and added that the bank’s aim will be to focus more on digital.

    “Maybe in the past, having a robust branch strategy was critical but with digitisation, geography has become history. So, I think our approach would be more digital,” he noted.

    At present, the bank has 17 branches and one unit at GIFT IFSC in the country. It also relies on the Indian workforce in global capability centres (GCCs) to deliver a host of other innovations and work for its global operations, making India home to the largest number of employees outside of its headquarters in Germany, with over 20,000 professionals.

    Shaparia said the GCCs in Mumbai, Jaipur, Pune and Bengaluru support the group’s operations in 48 countries through business engineering, modelling, quantitative analytics, extensive structuring, and research to deliver innovative financial solutions.

    It can be noted that many foreign lenders are relying on the digital channel to grow their India business, rather than expanding on branch presence. The regulator has also been pushing for such lenders to operate as a wholly-owned subsidiary rather than the branch model.

    Meanwhile, as part of its social commitments under the corporate social responsibility mandate, the lender opened an evening learning centre exclusively for lesbian, gay, bisexual, transgender and queer people for helping the community progress on the formal educational front.

    The centre in central Mumbai’s Sion will be followed up with a similar facility in Ghatkopar, and there will be another learning centre in Pune for all the constituents of the society, Shaparia said.

    Under its diversity, equity and inclusion focus, the lender also has a defined approach to hiring LGBTQIA+ employees, which includes participating in job fairs and creating awareness through campus engagements.

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  • RBI appoints retired CGM Singh on Bandhan Bank board

    RBI appoints retired CGM Singh on Bandhan Bank board

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    The Reserve Bank on Monday appointed A K Singh as an additional director on the board of Bandhan Bank.

    The appointment of Singh, a career central banker who retired as chief general manager of RBI, is for one year, the Kolkata-headquartered lender said in a regulatory filing. Bandhan Bank, however, did not specify the factors which have necessitated Singh’s appointment. There are not too many instances of such actions by the central bank.

    A recent precedent would include appointing a serving RBI official on the board of private sector lender RBL Bank, following reports of certain concerns in the running of the bank.

    It may be noted that the development comes ahead of Bandhan Bank’s founder and chairman C S Ghosh’s retirement from the bank on July 9.

    The microlender turned bank is grappling with a high proportion of stressed advances and has been wanting to reduce the share of unsecured loans in the overall pie.

    The Bandhan Bank scrip closed 0.67 per cent down at ₹207.75 a piece on the BSE on Monday, as against gains of 0.17 per cent on the benchmark.

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