City Macquarie Financial News

Financial Services, the non-bank lending arm of HDFC Bank, is expected to soon launch a Rs 12,000-crore IPO. According to a report by Macquarie Capital, while the non-bank lender commands valuations similar to Bajaj Finance in the unlisted markets, its return on assets is 30% lower than Bajaj Finance. The company is a good bet based on its potential for an improvement in return on assets driven by margin expansion, and lower credit costs given its best-in-class underwriting standards, says the brokerage.

private sector banks including HDFC Bank, ICICI Bank, and YES Bank are set to kickstart the third-quarter earnings season from 17 January.Non-food credit for the banking sector grew almost 12% on year as on 15 December, according to latest data from the Reserve Bank of India, driven by a consumption-led recovery and supportive regulatory measures. This was up from around 9% in May.“Growth momentum has strengthened over the past few months and credit cycle has seen a meaningful pickup after GST cuts…with the full 100 bps CRR (cash reserve ratio) cut now in place and recent supportive regulatory measures, further support to credit expansion expected ahead,” Motilal Oswal Financial Services said in a pre-earnings note.Pre-quarterly updates from lenders suggest this momentum has sustained into the December quarter, even as deposit growth has lagged, at a little over 9% on year.Macquarie Research flagged that the loan-to-deposit ratio (LDR) for the banking system has climbed to over 81%, the highest level on record.

Hinduja Group, which promotes IndusInd Bank, may be compelled to pledge up to 80% of its holdings in the bank if the stock price drops below Rs 600 per share, according to an analysis by Macquarie Capital. Analysts warn that the risk of pledging could extend to other Hinduja-led entities as the group works to repay debt and reduce collateral. IndusInd International Holdings (IIHL), led by the Hinduja Group and owning a 15% stake in the bank, has already pledged about 50% of its shares to Barclays Bank PLC and Deutsche Bank AG in exchange for a loan.

«We exited a lot of the risk to outside the system, outside economic systems, I should add. So, in other words, it is much more in the politics, in polarisation, in geopolitics,» says Viktor Shvets, Macquarie Capital. Nikunj Dalmia: Let me start with a very basic question. What is your view of the world given that there are so many permutations and combinations which are there. US interest rates are likely to go down. China is stimulating their economy. There is a problem in Middle East and yet India seems to be slowing down. So, there are a lot of trends within trends when it comes to the global setup. Viktor Shvets: Well, my view of the world has not changed that much over the last four or five years. Effectively, the way I look at the world as in a twilight. We no longer have recessions. We no longer have recoveries. There is nothing to recover from. We live in a twilight somewhere between recessions and growth. Global growth rates are getting shallower and IMF is correctly highlighting that we are growing 50, 100 basis points less than we used to. But at the same time, we do not have the bad things. We do not have spikes in bankruptcies. We do not have spikes in bad debts.

HDFC bank, Yes bank, CSB Bank and Karur Vysya Bank reported higher deposit growth print than credit growth, in a reversal of the sectoral trend of credit growth outpacing deposit growth over the past two years. India’s largest private sector lender HDFC Bank grew deposits by 15.1% year-on-year at the end of the September quarter taking its total deposit base to Rs 25 lakh crore. Sequentially deposits grew by 5% as it added Rs 1.2 lakh crore worth of deposits in one quarter alone. «Deposit growth is the metric that matters the most for HDFC Bank and it looks healthy, and going by the other banks’ headline metrics that have come in, there is a clear improvement in the liquidity environment,» said Pranav Gundlapalle, head, India financials at Bernstein.

Subscribe to enjoy similar stories. Investment funds KKR & Co., Stonepeak Partners and Macquarie Capital have sounded out merchant bankers to acquire a potential stake in India's No.3 telecom tower firm Ascend Telecom Infrastructure Pvt. Ltd, two people aware of the development said, after losing the race for American Tower Corp.'s India assets to Canada’s Brookfield.

HDFC Bank could report a subdued 6% growth in profits in the September quarter, Macquarie Capital said in a note on Thursday. According to Macquarie, profit after tax could grow at 6% on year at Rs 16,900 crore. The weak profit expectation is due to expectation of higher tax outgo. «Profit seems likely to be weak mainly on account of a higher tax rate and lower treasury profits,» said Suresh Ganapathy, Head of financial services research at Macquarie Capital.

Subscribe to enjoy similar stories. Mumbai: Indians are delaying repayments on credit cards and personal loans, leading to a rise in delinquencies after months of bingeing on small-ticket consumption loans. The volume of credit card dues where repayments are delayed by over 90 days has increased 17 basis points (bps) year-on-year to 1.8% in June, showed data from credit bureau TransUnion Cibil.

asset quality decline spawned by a protracted heatwave that crimped the ability of on-the-ground representatives to speed up collections. Polls through the summer also affected asset quality at mainstream lenders.

bank move as administrative in nature to ensure a smooth leadership transition in the Kolkata-based lender, but concerns over Bandhan Bank's asset quality perhaps kept investors anxious. The stock price closed lower at Rs 203.70 on BSE Tuesday, about 16% fall from Rs 242 seen on the first trading day of the year. «While the market may fear that there could be more skeletons in the closet — in terms of further increase in the stress pool — we believe this (appointment of additional director) is more of a prudent measure exercised by the RBI,» said Suresh Ganapathy, managing director and head of financial services Research at Macquarie Capital.

banks squeeze funding to this segment. Recent data show that bank funds to the non-bank segment dropped to 15% in April from 22% seen in the same period last year.

RBI issued a draft prudential framework for lenders undertaking project finance, which proposed an increase in standard asset provisioning to 1-5% of loans from the current 0.4% in a phased manner on project loans that are not overdue to stressed. When a project is in the construction phase, lenders must set aside a provision of 5% of the loan amount, according to the draft rules.

(Reuters) -Australian financial conglomerate Macquarie Group (OTC:MQBKY) on Tuesday said its fiscal 2024 year-to-date net profit after tax fell «substantially» due to weakness in its commodities and other market-facing businesses.

₹16,372.5 crore in the December quarter as net interest income showed a healthy increase. This figure handsomely beat estimates by 19 analysts polled by Bloomberg, who expected it to post a net profit of ₹15,762 crore in the quarter. The bank’s net interest income–the difference between interest earned and interest expended–grew 23.9% y-o-y to ₹28,471.3 crore.

By Anton Bridge and Makiko Yamazaki

It’s down to the short strokes at ASX-listed pharma distributor EBOS’s tilt for TPG Capital-backed pets and vets business Greencross, details of which were first revealed by this column last week.

Turns out Melbourne’s EastLink toll road is not the only Aussie asset that French infrastructure giant Vinci Group’s got its eye on.

The king of insurance broker acquisitions, Robert Kelly, is at it again.

Oil and gas explorer Karoon Energy and insurance broker roll-up Steadfast Group both pressed play on equity capital markets trips on Thursday morning, after preparations for both deals were revealed by Street Talk.

Acquisitive Australasian health care group EBOS is closing in on a deal to acquire TPG Capital-backed Greencross, Street Talk can reveal.

Four months after Barrenjoey’s bankers boarded Queensland Airports Limited, the auction is ready for take-off.