Tag: indian banks

While dealmaking elsewhere in the world slows to a crawl bankers in India recorded their best-ever quarter for mergers and acquisitions. India saw $82.3 billion pending and completed M&A deals in the second quarter, the highest amount on record, according to data compiled by Bloomberg. That’s more than twice as much as the previous record of $38.1 billion in the third quarter of 2019. Globally, M&A volume in the quarter reached $827.6 billion, down 8.7% from the same period in 2021. The surge in India was dominated by HDFC Bank Ltd.’s $60 billion all-stock purchase of Housing Development Finance Corp. in April, combining India’s most valuable bank and largest mortgage lender in the country’s biggest-ever M&A transaction. The move illustrated how India’s flagship companies, facing disruptive trends such as the rise of fintech and climate change, are turning to dealmaking as a tactic to dramatically reshape themselves. Read more

According to some analysts, banks saw some uptick in credit growth during the October – December period of 2021, which could help them report better profitability. The credit growth remained sluggish since the start of the coronavirus (Covid-19) pandemic in March 2020. Q3FY22 saw loan growth improving due to festive season demand along with pent-up demand as there were minimum economic disruptions due to lockdowns. According to Reserve Bank of India’s (RBI) data, year-on-year loan growth of banks inched up to 7.3 percent by the end of September, from about 6.1 percent in June end. "Q3FY22 is expected to be sequentially better on the growth and operational front for lenders, in general, barring a few exceptions,” ICICI Securities said in a note. Read more

When the Covid-19 pandemic broke out in March last year and a nationwide lockdown was imposed to restrict its spread, there were concerns all around over its impact on the banking sector. Bad loans were stabilising after a relentless rise for several years and there was a ray of hope for the banking sector after a long time with non-performing assets have crossed the hump. Then the Covid-19 pandemic broke out crippling economic activity due to the lockdown and fears of asset quality problems resurfaced. The Reserve Bank of India (RBI) too, raised a red flag about the possible ballooning of bad loans. Stress tests by RBI projected gross non-performing assets of the Indian banks to shoot up to 13.5% by September 2021 as compared to 7.5% in September 2020 – under a baseline scenario. The situation was predicted to worsen under a severe stress scenario. Read more