NPAs – Sectoral Analysis…

The passage of Ordinance related to NPAs has renewed the sense of urgency to clear up the mess with Gross NPA of the banking sector crossing Rs 6 lakh crore mark. More worryingly, there is no sign yet of a trend reversal. An analysis to understand where this NPA  is coming from.. It is important to understand … Continue reading NPAs – Sectoral Analysis…
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Ordinance on NPAs – The Fight Continues…

The promulgation of the Ordinance yesterday for resolution of Non Performing Assets (NPAs) is another measure to tackle the crisis gripping the banking sector. Yet, the ordinance could be another dead ball and nothing that one can hope would work wonders due to lack of market participants. A look at the implication of the ordinance… An Ordinance is … Continue reading Ordinance on NPAs – The Fight Continues…
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Corporate & Financial Sector Performance – RBI Report..

Corporate sector have improved its financial position substantially during first half of 2016-17 as per the Financial Stability Report published by RBI last week. However, the impact of this on bank NPAs is still not visible. Gross NPAs of the banks has increased during the last six months and may take some more time before … Continue reading Corporate & Financial Sector Performance – RBI Report..
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Corporate Investment – Is there a turnaround.??

After years of decline, Corporate investment appears to be readying for a take-off as per a report released by RBI. Aggregate loan sanctioned by banks and financial institutions (FIs) during FY16 rose nearly 10% to Rs 95,000 crore. The figure had been steadily declining since FY10 when it stood at a staggering Rs 5.6 lakh crore. Even though … Continue reading Corporate Investment – Is there a turnaround.??
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Public Sector Banks – Performance revisited..

SBI and a number of other Public Sector Banks (PSBs) declared their results for June’16 quarter last Friday. The results was a big sigh of relief as it provided much needed succor after heavy losses in March’16 quarter. A sample of PSBs including the top three, reported profit of Rs 3,100 crore, a sharp reversal from … Continue reading Public Sector Banks – Performance revisited..
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Bank Recapitalization – Precursor to consolidation..?!

Government’s decision to recapitalize banks is a prudent move which would reduce considerable stress from the banking sector. Public Sector Banks (PSBs) have been reeling under the load of growing NPAs which has caused significant erosion in their equity base and aversion to lending. While it would help the weaker banks to enhance their capital adequacy … Continue reading Bank Recapitalization – Precursor to consolidation..?!
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HCC – Too old to fail..!

HCC (Hindustan Construction Company) got reprieve from the lenders last week with the invocation of S4A (Scheme for Sustainable Structuring of Stressed Assets) scheme, released by RBI to tide over the bad debt crisis. The invocation of the scheme reflects lenders confidence in the strength of the company. A ninety-year old company should ideally fall in the category of ‘too … Continue reading HCC – Too old to fail..!
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Financial Stability Report – The Good and the Not so good…

RBI released its Financial stability report, published twice a year, last week. The report shows a significant reduction in financial stress being faced by the corporate sector even though operational stress, measured as capacity utilisation, doesn’t show much change. However, the corporate balance sheet improvement is not yet translating into gains for financial sector which continues … Continue reading Financial Stability Report – The Good and the Not so good…
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Restructuring SDR…!

RBI has come out with yet another set of guidelines to fight stressed Assets, the third in last about two and half years. While the guidelines reflect RBI’s intense deliberation and hard work – based on the experience of SDR, it is to seen whether it really brings some relief to parties concerned or ends up … Continue reading Restructuring SDR…!
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'Bank'ing on Consolidation..

State Bank of India (SBI) has set the ball rolling for consolidation in banking sector with stating its intentions to merge the associate banks with itself, a long awaited move. A brief look at the rationale and the challenges… For an industry to prosper, it is essential to have a competitive structure which is neither … Continue reading 'Bank'ing on Consolidation..
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