India Insight

Rate cuts by the Reserve Bank of India, new bank licence norms, bad loan worries and money laundering accusations – Indian banks are firmly in the public eye in 2013.

Going by stock returns, lenders have had a mixed year so far. The BSE banking sub-index has gained less than 1 percent, as compared to the benchmark Sensex’s return of nearly 3 percent. Big banks such as the State Bank of India have lost 13 percent while HDFC Bank has gained around 4 percent. Some smaller players have struggled, with IDBI and Bank of Baroda falling more than 20 percent.

Small private lender IndusInd Bank, which focuses on retail lending, has been the star performer with gains of around 25 percent, making it the best performing stock in the 14-share banking index in 2013, data showed.

Comparing the returns of these stocks in the last one year, IndusInd has risen more than 70 percent to top the return charts. The closest competitor is Yes Bank with gains of around 50 percent.

“The banks which have more of a retail business are the ones which are doing well,” said Vaibhav Agarwal, vice president (research) at Angel Broking, listing IndusInd, HDFC Bank and ING Vysya as examples.

Joke 1
Joe Blogger had a cheque returned last week. They said it was due to “Insufficient Funds.” Now, Joe’s not sure if they meant his account or the bank’s?

Joke 2
There are two sides to a bank’s balance sheet – the left side and the right side. On the left side, there is nothing right, and on the right side, there is nothing left!

My cell phone has been bombarded with forwarded jokes like the ones above ever since the global financial crisis started. At least some people have their sense of humour intact despite the troubled times. Some might even thank God for such small mercies.