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Key banking ratios-II: PSUs vs private

Mar 18, 2010

In this article, Equitymaster compares some of the key ratios of leading public and private sector banks in India, and how the same have changed over the past five years.

Banks: 'Private' score

Nov 9, 2006

Banking stocks were at the centre of the spotlight during the last couple of months, not without a reason! The month preceding the result season, and that which saw the 2QFY07 numbers trickling in, witnessed investors acknowledge the tenacity of the sector and its relevance in accomplishing the desired economic growth targets.

Banks: Crystal gazing...

Oct 26, 2006

Reckon this. The cumulative assets of top 5 Indian banks equal the assets of 5th largest bank in China. The top 5 Indian banks command 45% of total banking sector assets compared to global standards of 70% to 75% of total assets. The country's largest bank, SBI, features at the 80th position amongst the top banks in the world.

Banks: Good times ahead?

Oct 6, 2006

After a brief period of skepticism about sustenance of credit growth, roll back in PLR hikes and chances of further liquidity tightening, banking stocks are back in the reckoning. Reasons being no visible signs of slowdown in credit offtake and stability in interest rates. In fact, the banks' treasury portfolios that were so long a cause of anguish to investors (because of the mark-to-market losses) have of late caught their fancy. This is due to the benign excess provisioning on the AFS (availa

Banks: Penetration concerns!

Aug 18, 2006

An unprecedented demand for credit over the past 2 fiscals led to the country's credit to GDP ratio chart a steep climb. Infact in absolute terms the volume of credit nearly doubled between FY03 and FY06. The consistent 30% YoY growth in incremental disbursals persuaded banks to lighten their treasury portfolios and concentrate on the higher yielding advance book. The growth was not just in the retail segment (especially mortgage loans) but also in the corporate book (primarily SMEs). The corpor

UTI Bank: Quality concerns!

Apr 22, 2005

UTI Bank has posted a subdued performance of 33% YoY growth in its bottomline for 4QFY05 as compared to the 60% growth witnessed in 3QFY05. Despite 67% YoY growth in credit, the bank has posted operating margins of barely 6.1% for 4QFY05 and a dip of 18.0% YoY in operating profits. The growth in margins is primarily subdued due to the rise in interest expenses and operating expenses. The contribution from the other income side continues to be generous with the bank capitalizing on fee-based reve

Banks: No more NPA laundering

Apr 15, 2005

Window dressing their books of accounts, by temporarily hiving off the bad loan accounts, was a rampant norm with most smaller banks having a sizeable NPA legacy. The bad loans were taken in the books of the purchasing bank as standard assets and once again transferred to the original bank at a later date. The cosmetic transfer thus enabled banks to re-route the loss assets to their books as ‘fresh loans’. This method of laundering the loss assets will now be a thing of the past.

ING Vysya: Banking on ING

Mar 29, 2005

Dismal performance for four consecutive quarters undoubtedly warrants some caution on the part of investors and in case of ING Vysya Bank, the poor streak shows no signs of abating. The bank had a successful rights issue in Feb 2005 at a record discount of 90% to the market price, wherein three shares of the bank were offered against each share held, at Rs 45 each. Although the rights issue amplified the net worth of the bank by 31%, the consecutive losses have created a dent on its reserves.

Banks: A balance sheet reshuffle

Mar 23, 2005

GDP growth, industrial growth and money supply (M3) are the key factors having an influence on the dynamics of the banking sector. While both GDP and industrial growth move parallel to the sector’s credit disbursement trend, money supply (or liquidity) has an inverse relation to it. This is due the fact that while a buoyant economy supports higher income levels and therefore better liquidity, credit necessity for individuals and companies alike, diminishes.

Welcome foreign banks!

Mar 2, 2005

The much-debated issue of 'aying the red carpet' for foreign banks seems to have finally been sorted, with the RBI laying down the roadmap for the entry of the foreign entities into the country.

PSU Banks: 3QFY05 contradicting 9mFY05

Feb 15, 2005

The PSU banking sector posted a mixed performance for the quarter ending December 2004 with the big daddy SBI dwarfing all its peers in every respect. With most players having improved their capital adequacy ratios and showing proactiveness in safeguarding their asset quality, the sector seems to have of late, been focused on quality rather than quantity (which is not necessarily a bad thing).

Identifying a bank stock: Update!

Jan 7, 2005

Last year, we did a series of articles on how to identify stocks from various sectors taking the fundamental aspects into consideration. Here is an attempt to re-look at the factors that influence the performance of the banking sector and where these are headed in 2005.

Banks: Getting the priorities right…

Dec 13, 2004

The recent RBI regulation, for reprimanding foreign banks that have failed to comply with the ‘priority sector lending’ norms is a welcome change to the sector’s callous approach. The regulation (linking interest rate on funds deposited with SIDBI with lending shortfall) might restrain the banking sector’s complacency in this respect.

IDBI: The way forward?

Dec 10, 2004

Challenging one of the most aggressive banks in the country i.e. ICICI Bank in the retail space and gaining market share is no mean task! But IDBI Bank, post its merger with parent company IDBI, seems to be gearing up to achieve this feat.

IDBI Bank: Well-defined growth trajectory

Dec 8, 2004

Known for optimizing its retail franchise as a bulwark for high quality growth, IDBI Bank is now poised to embark on an aggressive expansion path. Besides expanding its retail network across 15 new cities, the bank is envisaging two strategic business units, post its merger with IDBI. While one SBU (erstwhile IDBI) will focus on development finance (corporate banking), the other SBU (the current IDBI Bank folio) will cater to commercial banking needs, the stress being on retail.

Banks: Where to from here?

Dec 6, 2004

The recent report released by the Reserve Bank of India (RBI) on the Trend and Progress of Banking in India is an eye-opener in many sense. As against the common belief that public sector banks are 'elephants that cannot dance', there are some interesting facts that shows that all is not bad! We take a closer look at the non performing assets (commonly referred as NPAs) side of the banking sector and what lies ahead?

UTI Bank: Exercise caution!

Dec 6, 2004

Indian banks have finally started feeling the heat towards their cost of funds. With a rise in G-Sec yields, the deposit rates are under scrutiny. It is pertinent to note that, in contravention to the common perception that the hike in the lending rates is likely to augment the spreads, a hike in the deposit rate on the other side, is set to nullify this effect! To prevent a hit on the bottomline, the option most banks resort to is to go on a lending spree, with little heed to the quality of ass

ICICI Bank: Capitalising on Retail

Dec 3, 2004

“The largest provider of retail finance delivering unique value proposition to customers”. Thanks to the paradigm shift in the customer preferences and expectations from the banking industry, ICICI Bank (the only identifiable universal bank in the country) is able to make such claims and leverage on its competencies to access mass retail asset pools.

HDFC Bank: What fundamentals say?

Dec 1, 2004

On the 30th of November, as the stock markets rallied and closed at a historical high, one of the forerunners was HDFC Bank (52-week high levels). While the markets as a whole seem to have turned positive on banking stocks off late, it would be wiser to analyse whether fundamentals support the price.

IDBI Bank: Temporary setback

Oct 30, 2004

IDBI Bank, one of the fastest growing new generation private sector banks, has continued to show strong growth in its core operating numbers for the September quarter. While the bank's topline has risen by over 30%, its bottomline has improved by a marginal 4%. Due to significant provisioning for depreciation in the value of investments and fall in other income, the bottomline growth of the bank has been negatively affected. At the same time, strong growth in topline and less than proportionate

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