LOAN PORTFOLIO GROWTH
Ujjivan SFB adjusts loan growth guidance amid microfinance stress
I think these are things that we have to monitor very carefully and hopefully once the budget is out and announced and the revenues trickle into the economy, I think we will see some benefits from that. So, all in all, we are looking at a better second half. The effect is more in the first half of the year.
Muthoot Microfin to stay on the radar with a few tailwinds
A part of Muthoot Pappachan Group, the company provides micro loans to women with a focus on rural areas. It had 1,508 branches in 353 districts across 18 states of India as of March 2024. Its AUM grew by 32.4% year-on-year to ₹12,193.5 crore in FY24.
Rajesh Kothari on top three themes to bet on for solid returns
Next three years that gap is not going to be big. In fact, the private sector banks actually can do better than public sector banks in terms of the overall earnings growth because the bulk of that benefit of credit cost is already behind us.
RBI's special audit over, IIFL Finance appoints team to implement corrective actions
IIFL Finance, under scrutiny by the RBI for irregularities in its gold loan portfolio, has taken corrective actions to address concerns. RBI directed the company to halt new gold loans due to supervisory concerns and deviations in gold assessment. The company raised capital through rights issues and NCDs to mitigate risks and reported a net profit in Q4.
Microfinance portfolio rose 26 per cent in FY2023-24: Report
The Microfinance sector's portfolio outstanding reached Rs 442.7k crore, rising 26.8% in FY' 2023-24. Personal loans grew the second fastest at 38.3%, with NBFC MFIs dominating the market at 39.2% share.
Microlenders’ books up 24.5%, asset quality improves
The microfinance market expanded by a fourth in FY24 with improved asset quality, driven by better loan recovery. Data from the Microfinance Institutions Network (MFIN) shows a 24.5% growth in the gross loan portfolio to ₹4.34 lakh crore.
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Microfinance market expands by a fourth in FY24 with asset quality showing significant improvement
The microfinance market expanded by a fourth in FY24 with asset quality showing significant improvement. The sector's gross loan portfolio grew 24.5% year-on-year to Rs 4.34 lakh crore at the end of March. The bad loan ratio fell to 7.9% from 8.6% a year back, according to industry data.
PNB plans to expand its overseas footprint, to open representative office in Dubai
State-owned Punjab National Bank is set to establish a representative office in Dubai, expanding its global presence. With board approval secured, regulatory clearance is underway. The bank aims to enhance profitability by focusing on various portfolios and increasing non-interest income while maintaining credit cost below 1%.
Banks's CD ratio dips 50 bps since March
The Credit to Deposit (CD) ratio of commercial banks fell by 50 basis points since March, signaling a potential slowdown in credit growth due to slower deposit growth. As the RBI maintains current rates, deposit rates are unlikely to rise, possibly pressuring loan growth despite expected capex spending boosts. The CD ratio, considering the HDFC merger, dropped from 80.27% in late March to 79.79% by May 17.
Credit-to-deposit ratio of banks falls 50 bps since March as deposit growth slows
The credit-to-deposit ratio (CD ratio) of commercial banks has decreased by 50 bps since March, indicating a slowdown in credit growth due to slower deposit growth. Despite expectations of stable rates and stagnant deposit rates, there may be further pressure on loan growth. The latest data from the Reserve Bank of India shows a decline in the CD ratio, suggesting that banks are lending less in proportion to the deposits they collect.
Risk weighting slows unsecured loan growth
The growth of unsecured credit in India, including personal loans and credit card outstanding, slowed to 18% in April from 23% in November 2023. The Reserve Bank of India's risk weighting on such exposures aims to reduce delinquencies in the banking system.
Home loan borrowers may have repaid higher amounts
In FY23, for instance, the combined outstanding home loan portfolio of public sector and private banks and housing finance companies, which account for a big majority of the home loan market in the country was, Rs 3.62 lakh crore. But disbursements were much higher - at Rs 8.08 lakh crore. In terms of growth, while the outstanding portfolio grew 16%, the disbursements expanded 20%, according to the data released by the National Housing Bank.
Financial frauds declined by 46.7 per cent during 2023-24: RBI annual report
The Reserve Bank of India (RBI) reported a 46.7% drop in fraud value for 2023-24 compared to the previous year. Private-sector banks reported the most frauds, mainly small digital payment frauds, while public-sector banks had the highest fraud value, primarily in loans. The report highlights a focus on regulation, supervision, and financial stability for 2024-25, including enhancing cyber response and using AI to prevent fraud. It also notes India's robust economic growth, with strong macroeconomic fundamentals and significant capital expenditure planned. The Pradhan Mantri Garib Kalyan Anna Yojana extension will bolster food security.
IDFC First Bank to raise Rs 3,200 cr via preferential issue to LIC, others
IDFC First Bank will allot around 39.68 crore shares to some of India's biggest institutional investors, including LIC, HDFC Life, ABSL Insurance, Bajaj Allianz Life, ICICI Lombard, and SBI General Insurance.
Cosmos to meet RBI’s target for small sized loans at 50% loan book this year
Cosmos Bank, a Pune-based bank, aims to meet the Reserve Bank of India's target of maintaining 50% of its loan portfolio with ticket size less than Rs one crore this fiscal. The bank plans to use its network of 179 branches to achieve this goal. Currently, 43% of the bank's loan book comprises loans below Rs 1 crore. Cosmos Bank plans to raise technology spends to up to 20% of profits and cut costs through automation.
ETMarkets AIF Talk: Fund Manager of Rs 1200 cr AUM reveals 4 key factors for wealth creation in small & midcaps
Aditya Sood, Fund Manager at InCred Asset Management, discusses small companies' growth potential in an interview with ETMarkets. Sood says that the cost of capital in India will structurally decline over the next 5-7 years, benefiting small and mid-cap companies. Many of the investee companies, though small in size, are already market leaders or challengers in niche industries with substantial growth potential
Manappuram Finance Q4 Results: Profit beats Street estimates on healthy loan growth
Indian gold-loan provider Manappuram Finance reported a better-than-expected fourth-quarter profit on Friday, helped by strong loan growth at both its gold and non-gold segments.
2 sectoral bets from Ganeshram Jayaraman for next 2 years
This has led to a very positive capex cycle, likely to start private sector capex cycle. This very good profit growth also led to strong government capex because tax collections were buoyant. So, it was a very strong demand, supply, earnings and valuations cycle.
Growth to come from MSME, affordable housing: Rajesh Sharma, Capri Global
Even the current risk rate have been increased, cost of fund is going up. The NBFC is only one option to pass on that cost to the customer
PNB Housing Finance expects 17% loan growth in FY25 aided by increase in branch network
The housing finance company opened 100 branches last year, which will help in expanding business including in affordable segment.
Improving asset quality, reach to keep Jana SFB on growth path
JSFB provides micro financing, secured business loans, loans against property, micro, small and medium enterprises loans, loans against deposits and gold, and loans to finance companies. The bank strives to reduce reliance on unsecured loans by expanding the portfolio of secured loans. At the end of March 2024, its total loan book was worth Rs 24,746 crore.
LIC Housing Finance eyes lower double digit loan portfolio growth in FY25
LIC Housing Finance targets "lower double-digit" loan portfolio growth this fiscal, focusing on affordable housing, says MD Tribhuwan Adhikari. March saw a 4.3% y-o-y loan portfolio rise to Rs 2.87 lakh crore. Annual loan disbursement dropped 8% to Rs 58,937 crore, partly due to cautious lending amid competition from other lenders.
L&T Finance aims at 25% CAGR, retail lending in focus
L&T Finance Ltd aims for a 25% compound annual growth rate (CAGR) in the coming years, focusing on strengthening its retail lending business. The financial services arm of Larsen & Toubro plans to exit the wholesale segment entirely by 2026, becoming a 100% retail non-banking financial company (NBFC). The company introduced a new offering, 'Complete Home Loan', signaling a fresh push in its mortgage business, expected to surpass microfinance in book size.
Nexus Select leases 1.1 million sq ft retail space in FY24, records highest occupancy
Blackstone-backed Nexus Select Trust, India’s first listed retail REIT, achieved a record 97.6% occupancy in FY 2023-24. The trust is set to acquire three Hyderabad malls, financing through debt, aiming for asset portfolio growth.
How lenders manage risk in MSME lending when credit history is not available
Some of the traditional methods used for credit assessment of businesses such as using credit history to predict behaviour or analysing cash flows and profitability using bank statements and financial statements are not very helpful.
Monetary, prudential steps' tango helps cut home loan NPAs
Prudential measures like risk weights and loan-to-value adjustments, along with interest rates, will be more effective in repayments of loans. This will also help in housing credit growth and controlling the asset quality of banks' home loan portfolios, it shows.
PNB Housing Finance eyes over 17% growth in FY25 loan book
Managing director Girish Kousgi told ET that the lender is aiming to grow its retail book by 17% in FY25, while the overall loan growth is likely to be more when it resumes corporate lending.
PNB Housing Finance aims to grow business by 17% in FY25, the highest rate since 2019
PNB Housing Finance targets significant loan portfolio growth in FY25, driven by retail lending focus. The lender aims to balance affordable, emerging, and prime segments, with strategic branch distribution and varied interest rates for different loan types.
IPL portfolio: Momentum stocks may not deliver sustainable returns, says Robin Arya
Robin Arya recommends investors stick with consistent stocks for steady growth over time, similar to reliable IPL teams. He suggests a diversified portfolio with equities, bonds, and alternative investments for stability and growth potential in uncertain market conditions. High-risk, high-return opportunities may seem enticing in the short term, the power of compounding and steady growth over time typically outperforms volatile ventures.
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