India Financial Services Correspondent, Mumbai
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Feb 1, 2016

Mortgages offer silver lining for India’s banks as corporate loans languish

MUMBAI/NEW DELHI | BY DEVIDUTTA TRIPATHY AND ADITI SHAH         Labourers transport cement bags onto an improvised motorised rickshaw at the construction site of a residential complex on the outskirts of Kolkata, India January 23, 2016.                                                                                   India’s banks, struggling to boost mainstay corporate loans, are finding a bright spot in a home-buying spree in the country’s towns that has driven mortgage-loan growth to the fastest rate in at least six years.

Top lender State Bank of India (SBI) (SBI.NS), and two big private sector peers – ICICI Bank (ICBK.NS) and Axis Bank (AXBK.NS) – say demand for credit from smaller centres in the country is helping grow their overall home-loans books. Outstanding home loans in India stood at $103 billion as at end-November.

The mortgage tailwind comes as India’s banks are focusing on lending to individuals to counter a sluggish corporate-loan market that has been hit by a three-year long slowdown in Asia’s third-largest economy. Home loans also pose lower bad-debt risks for the banks than corporate loans, data shows.

Feb 1, 2016

Axis Bank sees bad loans surge on RBI move

MUMBAI | By Devidutta Tripathy     People use a staircase next to a corporate branch office of Axis Bank in New Delhi July 18, 2013. REUTERS/Anindito Mukherjee/Files         People use a staircase next to a corporate branch office of Axis Bank in New Delhi July 18, 2013.      

MUMBAI Axis Bank Ltd, India’s third-biggest private sector lender by assets, reported a surge in bad loans in the December quarter, as the Reserve Bank of India (RBI) asked lenders to reclassify some troubled loan accounts as bad loans.

The bank also said additions to bad loans would be higher than initially expected in the current quarter too.

Feb 1, 2016

RIL expects to maintain higher refining margins, eyes crude from Iran

MUMBAI | BY PROMIT MUKHERJEE AND DEVIDUTTA TRIPATHY

 

A gardener works next to a board of Reliance Industries Ltd at Gandhinagar in Gujarat, India, January 19, 2016.

Reliance Industries(RELI.NS) expects to maintain high margins for its main oil refining business after strong demand pushed it to a seven-year high and helped it post a better-than-expected 39 percent profit rise in the December quarter.

Feb 1, 2016

Banks see credit pick up as India Inc borrows again

MUMBAI | By Devidutta Tripathy     A cashier counts Indian rupee currency notes inside a bank in Mumbai December 6, 2013. REUTERS/Danish Siddiqui/Files         A cashier counts Indian rupee currency notes inside a bank in Mumbai December 6, 2013.    

MUMBAI India’s banks say they expect credit growth to pick up moderately this financial year after falling to an almost two-decade low, as consumer confidence grows and companies resume borrowing to keep plants running and fund new projects.

Bank credit is a key source of funding for companies in Asia’s third-largest economy and is often seen as a barometer of economic activity.

Feb 1, 2016

Reliance Comm and Aircel in talks to merge Indian mobile businesses

MUMBAI | By Devidutta Tripathy     A man opens the shutter of a shop painted with an advertisement of Reliance Communications in Mumbai, India, November 3, 2015. REUTERS/Shailesh Andrade/Files       A man opens the shutter of a shop painted with an advertisement of Reliance Communications in Mumbai, India, November 3, 2015. Reuters/Shailesh Andrade/Files  

MUMBAI Reliance Communications and Aircel have begun talks to combine their wireless telecom operations to create India’s second largest mobile operator as intensifying competition fuels consolidation in a crowded market.

The Reliance mobile phone business is India’s fourth-biggest by customer numbers while Aircel ranks fifth. The combined business would surpass Vodafone’s Indian operation as number two in the sector.

Feb 1, 2016

Distressed loan buyers muddy India’s bad debt picture

MUMBAI | By Devidutta Tripathy and Clara Ferreira-Marques         Commuters walk past a bank sign along a road in New Delhi, November 25, 2015. Reuters/Anindito Mukherjee  

MUMBAI Set up over a decade ago to absorb India’s mountain of distressed loans, asset reconstruction companies have done little to recover cash or relieve a debt-choked banking system.

Instead, at a time when regulators are pressing the banking sector to clean up balance sheets, the so-called ARCs are striking mostly paper deals that help lenders extend provisioning by years, camouflaging the scale of their woes.

Feb 1, 2016

UPDATE 1-As India’s Rajan tightens screws, banks can still disguise bad debts

* Bid to clear India’s corporate bad debt hits hurdles

* Central bank says will deal with banks not playing by rules

* $110 bln of stressed corporate debt weighing on economy

* Bankers and RBI say too soon to dismiss scheme (Adds official RBI comment in paragraphs 12-13)

By Devidutta Tripathy and Clara Ferreira-Marques

MUMBAI, Dec 9 A tool provided by India’s central bank to help lenders tackle bad debts is instead helping to camouflage the scale of the problem, evidence of how the country’s banks will struggle to meet an ambitious clean-up target in 16 months’ time.

Feb 1, 2016

HDFC Bank sees green shoots as Indian companies borrow again

MUMBAI | By Devidutta Tripathy and Clara Ferreira-Marques       The headquarters of HDFC bank is pictured in Mumbai, December 4, 2015. Reuters/Shailesh Andrade  

MUMBAI HDFC Bank, India’s largest lender by market value, said it is beginning to see “green shoots” in corporate loan growth, as companies begin to borrow and spend again after almost two years of reining in.

The combination of a more conservative stance among state-run banks – hit by bad loans – and a lack of demand as the economy slowed, has held back Indian business lending. But there are signs of a change.

Feb 1, 2016

India’s Rajan expects banks to clean up bad loans by March 2017

MUMBAI | By Devidutta Tripathy     Reserve Bank of India (RBI) Governor Raghuram Rajan watches before delivering a lecture at the India Habitat Centre in New Delhi, India, November 6, 2015. . REUTERS/Anindito Mukherjee Reserve Bank of India (RBI) Governor Raghuram Rajan watches before delivering a lecture at the India Habitat Centre in New Delhi, India, November 6, 2015. . Reuters/Anindito Mukherjee  

MUMBAI Reserve Bank of India Governor Raghuram Rajan said on Tuesday he expects bad debt-burdened banks to clean up their balance sheets by March 2017, warning the central bank would monitor whether concessions made to lenders were being misused.

India’s banks are struggling under $100 billion of stressed loans, choking the financial system at a time when the economy needs fresh investment to galvanize growth. Bank loans are a key source of financing for the bulk of Indian firms.

Nov 9, 2015

Bank of India sinks to Q2 loss as bad debts jump

MUMBAI, Nov 9 (Reuters) – Bank of India, the
nation’s third biggest state-run lender, sank to a quarterly net
loss as bad loans spiked, forecasting difficult months ahead
while it tightens efforts to claw back debt.

The bank, which had been expected to report a modest profit,
instead on Monday reported a 11.26 billion rupee ($169.6
million) net loss for the second quarter to the end of
September. Much of the damage was caused by what it termed
“spillover” provisions, which should have been accounted for in
the last fiscal year.