Banking - Industry Update - Microsec

Moody's Investors Service said its outlook on the Indian banking system for the next 12-18 months remains negative, reflecting the continued challenging nature of its domestic operating environment. The global credit rating agency has had a negative outlook on the Indian banking system since November 2011.“This environment is characterised by slow economic growth, high inflation, high interest rates, and a weak local currency, and we expect these factors to lead to a further deterioration in asset quality, an increase in provisioning costs, and a fall in profitability."

India Ratings has affirmed ING Vysya Bank's Long-Term Issuer rating at 'IND AA-' with a stable outlook on adequate capital position, improving asset quality and moderate funding profile. “ING Vysya's capitalisation is currently adequate. However, the bank will need to raise capital regularly to support its above-system-average growth targets. The bank raised Rs 970 crore of equity capital in FY'12 through a qualified institutional placement, in which its parent, ING Vysya NV, participated to the extent of its 44 per cent shareholding,” the ratings agency said in a statement. The rating also factors in the bank's relatively weak (although improving) profitability and relatively high proportion of loans to the traditionally volatile SME sector.

The Reserve Bank of India (RBI) and the Bank of Japan (BoJ) have concluded a three-year Bilateral Swap Arrangement (BSA) between India and Japan. The BSA, which was signed by RBI Governor D. Subbarao and BoJ Governor Masaaki Shirakawa, has become effective as of December 4, 2012. The arrangement aims at addressing short-term liquidity difficulties and supplementing the existing international financial arrangements, as one of the efforts in strengthening mutual cooperation between Japan and India. The BSA will enable both countries to swap their local currencies (i.e., either Japanese yen or Indian rupee) against US dollar for an amount up to $15 billion. In the past, both the countries had a similar arrangement for an amount up to $3 billion for a period of three years from June 2008 to June 2011. The enhancement of the BSA will further strengthen economic and financial cooperation between the two countries and accordingly contribute to ensuring financial market stability, said an RBI statement.

The GMR Group will “seamlessly transfer” the Male international airport to the Maldives Government by Friday. This was decided at a meeting attended by the Attorney-General, acting Defence Minister and the Tourism Minister, according to Masood Imad, Press Secretary to the Maldivian President. Earlier, in a blow to the Bangalorebased GMR group, a Singapore court ruled that the Maldives Government had the authority to take back the airport, which was being modernised by a GMR-led joint venture.

NTPC on Thursday said it has raised Rs 600-crore term loan from The Jammu & Kashmir Bank Ltd. The funds would be used to part-finance the capital expenditure of its projects. NTPC said that it has been raising debt from Indian banks and financial institutions since November 1999. Till now, it has signed loan agreements for Rs 57,629.35 crore. Of these, loans worth Rs 41,404.35 crore have been utilised.

National Thermal Power Corporation (NTPC), which had sought the state government intervention to direct Mahanadi Coalfields Ltd (MCL) for additional coal supply by rail to its Talcher power station, received a major jolt as the Coal India subsidiary has declined to give any commitment. Between April and October, coal supplies to TTPS were 15.91 lakh tonne against pro-rata Fuel Supply Agreement (FSA) quantity of 13.88 lakh tonne. Since the power producer has already received excess coal, no guarantee can be given on additional coal supply, the miner justified. The power generator had sought the government intervention as coal supplies by rail was 13 rakes in August and just six rakes in September, against NTPC's demand of 45 to 60 rakes per month. Even though the supply situation improved in November to 30 rakes, the TTPS official said in absence of commitment from MCL, it would be difficult to guarantee desired power generation for the state.

Source : Equity Bulls

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