Banking wrap: State-owned banks gear up to raise equity, SBI says limited room for improvement in margins

Earnings season for lenders drew to a close on August 2 with State Bank of India (SBI) posting its results.

Most state-run banks indicated plans for raising equity current financial year to maintain the minimum capital adequacy levels.

However, their capability to successfully tap markets depends upon recoveries from bad loan resolutions that are stuck at the National Company Law Tribunal (NCLT).

The delay is adding to provisioning burden and wiping out lenders’ profits.

SBI Q1: Expect net interest margin at 3.1% for FY20, says Chairman Rajnish Kumar

State Bank of India (SBI) Chairman Rajnish Kumar expects limited improvement of the bank’s net interest margins (NIMs) this financial year on the back of muted credit growth and a lack of room for further reduction in the cost of funds.

It will be very difficult for the bank to push margins up in a significant manner in the current scenario where credit growth is muted, Kumar said on an earnings call on August 2.

He added that while there could be some change in term deposit rates, the lender has done whatever it could in terms of bringing down the cost of funds.

Bank of India to realize Rs 600 crore via sale of non-core assets in Q2

Bank of India (BoI) aims to raise over Rs 600 crore by selling stake in two subsidiaries-STCI Finance and Equifax Credit Information Services (ECIS) by September-end, the state-owned lender said after announcing its first-quarter results on July 30.

The bidding process for disinvestment in both the subsidiaries is on, said N Damodharan, Executive Director, BoI, adding that the sales are likely to be finalized in the July-September quarter.

Union Bank of India to raise Rs 3,000 crore via QIP in Q3

Mumbai-based Union Bank of India plans to raise Rs 2,000-3,000 crore equity in the October-December quarter this financial year to boost capital adequacy and support credit growth.

The bank’s capital adequacy ratio stood at 11.43 percent, with Tier-1 at 9.27 percent and Common Equity Tier-1 ratio at 7.87 percent, as of June 30.

The state-owned bank will take the Qualified Institutional Placement (QIP) route for fund raising and has started the process of shortlisting advisors, the bank’s MD and CEO Rajkiran Rai G said on August 2.

Yes Bank taps API in hope to revive fee income

At a time when corporate lending has taken a hit, Yes Bank is looking to strengthen its transaction banking business to boost fee income.

The private lender plans to double its corporate client base on API banking platform this financial year, said Asit Oberoi, Senior Group President and Global Head Transaction Banking Group and Chief Experience Officer, Yes Bank.

Axis Bank braces for slower growth, beefs up contingency provisioning

After HDFC Bank and ICICI BankAxis Bank has now indicated that credit growth may take a hit in the coming quarters as the impact of slowdown intensifies. The private lender also beefed up additional provisioning to absorb any shocks in asset quality going ahead.

RBI slaps fine on 8 public sector banks for violating norms

The Reserve Bank of India (RBI) imposed monetary penalty ranging between Rs 1-2 crore on eight public sector banks for violating norms on fraud classification, bill discounting and monitoring of end use of funds.

Bank of BarodaBank of IndiaIndian Overseas Bank and Union Bank of India were fined Rs 1.5 crore each, while Allahabad Bank and Bank of Maharashtra were penalised Rs 2 crore each. Oriental Bank of Commerce was penalised with Rs 1 crore, the RBI said.