Tides of 3.11.2015

1.      Rating agency Moody’s has changed its outlook for India’s banking system to stable from negative due to an improvement in the operating environment for banks. The outlook was negative for the past four years. The problem of bad loans has impacted the ratings outlook in the past. Srikanth Vadlamani, Vice-President and Senior Credit Officer at Moody’s, said that 11 of the 15 rated banks had added about Rs. 1.2 lakh crore of bad loans during each of the past four years. But now, the improved operating environment will result in slower pace of additions to problem loans, leading to a more stable impaired loan ratio.

2.      Financial services major Edelweiss has not given up on its plans to enter the banking sector. It may in the next three to four years renew efforts for the banking foray, Rashesh Shah, Chairman and CEO, Edelweiss Group, said.Shah expects Edelweiss’ asset base to cross Rs. 50,000 crore in the next three-four years. He felt that achieving this milestone cou ld be the right stage to set up a universal bank.“There is no hurry. Our current asset base is Rs. 30,000 crore. Up to Rs. 50,000 crore, we don’t have to be a bank. If we want to go above Rs. 50,000 crore, then we may have to become a bank. After three-four years, we will do it (achieve Rs. 50,000 crore asset base and set up a bank),” Shah told BusinessLine .Edelweiss had not made the cut when the Reserve Bank of India had invited applications for of universal bank licences.

3.      Indian Bank’s net profit for the second quarter of this fiscal has jumped 17 per cent over the comparable quarter last year.It reported a net profit of Rs. 369.31 crore ( Rs. 314.33 crore in the year-go quarter) on a total income of Rs. 4578.65 crore ( Rs. 4340.32 crore) for the quarter ended September 30, 2015.The bank benefited from treasury operations, which contributed Rs. 194.18 crore ( Rs. 80.72 crore) to the profits. Corporate banking brought in Rs. 282.23 crore ( Rs. 361.62 crore), retail banking Rs. 239.61 crore ( Rs. 303.34 crore), and other banking operations Rs. 19.47 crore ( Rs. 19.23 crore).On the assets front, the slippages were marginal with gross non-performing assets (NPAs) standing 4.61 per cent ( Rs. 5,772.77 crore) of gross advances as of September 2015, against 4.21 per cent ( Rs. 5,003.41 crore) in the year-ago period.Likewise, net NPAs were 2.60 per cent ( Rs. 3,187.53 crore) of net advances during the quarter under review, up from 2.55 per cent ( Rs. 2,975.85 crore) in the same quarter of the previous fiscal.In the first quarter of the current fiscal, gross NPAs stood at 4.65 per cent ( Rs. 5,815.14 crore) and net NPAs 2.62 per cent ( Rs. 3,193.29 crore).Mahesh Kumar Jain, Managing Director and CEO (Additional Charge), Indian Bank, told media persons that the bank has managed to contain slippages in sequential quarters with enhanced recovery and containing big-ticket exposure.