From hope to happiness: Analysts find SBI's FY2020 plan credible

State Bank of India (SBI) seems to be taking the Rs 77.18-billion loss in the March 2018 quarter in its stride with the bank’s chairman Rajnish Kumar expecting better days ahead.

“The year gone by was one of despair, the current year is one of hope and 2019-20 will be the year of happiness,” Kumar said.

He expects gains from higher credit growth, robust financial profile and control on costs.

Despite SBI’s poor numbers, the stock market has taken an optimistic view on the outlook as is evident from the stock gaining 7.4 per cent in two trading sessions.

Analysts say FY2020 targets as set by the country’s largest lender are credible and very much within reach. The clean-up of balance sheet involving recognition and provisioning for bad loans is almost through. While retail credit, which was 57 per cent of total loans in FY18, is growing at a healthy pace. Its leadership position in corporate lending, for which demand is picking up, will also stand in good stead.

ECB should maintain stimulus, calls for end are 'premature', says IMF

The European Central Bank (ECB) should maintain a "firmly accommodative" monetary policy for an "extended period", the International Monetary Fund (IMF) said on Tuesday, as it forecast inflation remaining below target.

As the ECB prepares for a decision in autumn on whether to claw back its stimulus programme, the IMF said calls for an exit from easy-money policy were "premature" because consumer prices were not increasing enough.

In its annual report on the euro zone, the IMF estimated euro zone inflation will reach 1.6 percent this year before slowing to 1.5 percent in 2018, below the ECB target of below but close to 2 percent.

The forecasts were actually stronger than the ECB's latest one, released in June, which predicted the bloc's inflation rate at 1.5 percent this year and 1.3 percent in 2018.

"The costs of a long period of inflation undershooting continue to exceed those of a temporary overshoot," the IMF said.

"The calls from some quarters for an exit from monetary accommodation are therefore premature," it added. Germany has been the biggest critic of ECB's 2.3 trillion euro ($2.7 trillion) money-printing programme.

To help a sustained recovery of inflation, the IMF encouraged Germany and other euro zone's countries with high growth to push for "robust" wage and price rises, even if this could bring domestic inflation beyond the 2 percent limit for a limited period.
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With Rs 6 lakh cr NPAs, PSBs may be asked to auction stressed assets

BREAKING NEWS - State-owned banks reeling under the burden of stressed assets may be asked to put defaulter companies' assets on the block.

On Wednesday, the Cabinet approved an ordinance to empower the central bank by amending the Banking Regulation law to give it more teeth and set up oversight committees to intervene on behalf of banks while deciding on non-performing assets (NPAs).

There will also be fresh guidelines for the public auction of assets by public sector banks.

"The large, cash-rich public sector undertaking will be encouraged to buy the auctioned assets in their sector by the state-owned banks," said an official.

The amendment of section 35A of the Banking Regulation Act, 1949, will give the Reserve Bank of India (RBI) the right to issue directives in the interest of banks.

President Pranab Mukherjee is expected to give his assent to the ordinance shortly.

The stressed banks may also be encouraged to take a haircut in case of genuine business failure.

Currently, public sector banks (PSBs) are saddled with NPAs or bad loans to the tune of a staggering Rs 6 lakh crore.

Finance Minister Arun Jaitley on Wednesday said that the Cabinet has taken some important decisions with respect to the banking sector which have been referred to the President for assent.
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Bank of India sees further improvement in bad loans in Dec quarter

Latest News - Bank of India Ltd does not expect any additional bad loans in the current quarter on a net basis, its chief said on Thursday, as India's sixth-biggest lender by assets reported its second consecutive quarter of profit after a stretch of losses.

The state-run lender booked a net profit of 1.02 billion rupees ($15 million) for the three months ending in December, compared with a net loss of 15.06 billion rupees a year earlier.

Gross bad loans as a percentage of total loans as at the end of December eased to 13.38 per cent from 13.45 per cent as at September-end.

For the fourth quarter through March, the bank expects gross bad loan additions of (Read More)

Six expectations of banking sector from Budget 2017

Latest News - With the Union Budget 2017 just a sniffing distance away, banking stocks are on a roll.  

The BSE Bankex, the barometer of banking stocks, has shot up 12% since its December lows in the anticipation of budgetary stimulus to keep demons of demonetisation at bay. 

Since the low 2,0148 hit on December 26, the Bankex has risen 12% to settle at 22,566 last week. This is against an 8% rise in Sensex during the same period.

Bank stocks such as YES Bank (up 27%), Federal Bank (up 26%), Punjab National Bank (up 20%), IndusInd Bank (up 18%) and Bank of Baroda (up 14%) have seen a phenomenal rally in the (Read More)