Latest news with #ReserveBankOfIndia
Yahoo
4 days ago
- Business
- Yahoo
Kotak Mahindra Bank's Q1 profits drop more than expected on higher provisions
MUMBAI (Reuters) -Kotak Mahindra Bank, India's third-largest private lender by market capitalisation, reported a drop in first-quarter profit on Saturday, as it set aside more funds for potential bad loans and saw a contraction in lending margins. The bank's standalone net profit fell 47.5% to 32.81 billion indian rupees ($379.42 million) for the quarter ended June 30, down from year-earlier 62.5 billion rupees ($722.75 million), which included a 27.3 billion rupee gain on a stake sale of its insurance subsidiary to Zurich Insurance last year. On average, analysts had expected a profit of 35.82 billion rupees, according to data compiled by LSEG. The lender's net interest margin, a key gauge of profitability, fell to 4.65%, from 5.02% a year earlier, reflecting the impact of the Reserve Bank of India's recent interest rate cuts. When rates are lowered, banks typically pass on the benefits to borrowers first and only later reduce deposit rates, which can temporarily squeeze margins. Meanwhile, Kotak Mahindra Bank's asset quality deteriorated, with the gross non-performing assets ratio at 1.48% at the end of June, versus 1.39% a year earlier. Indian lenders have kept a tight lid on unsecured lending after grappling with higher bad loans in that segment, a move that has helped support asset quality. The bank's provisions for bad loans more than doubled year-on-year to 12.08 billion rupees. Net interest income grew 6% to 72.59 billion rupees in the first quarter. While credit growth has slowed across the industry, Kotak Mahindra Bank's loan book expanded 13%, driven mainly by a 16% rise in loans to retail consumers. ($1 = 86.4750 Indian rupees) Sign in to access your portfolio
Reuters
4 days ago
- Business
- Reuters
Kotak Mahindra Bank's Q1 profits drop more than expected on higher provisions
MUMBAI, July 26 (Reuters) - Kotak Mahindra Bank ( opens new tab, India's third-largest private lender by market capitalisation, reported a drop in first-quarter profit on Saturday, as it set aside more funds for potential bad loans and saw a contraction in lending margins. The bank's standalone net profit fell 47.5% to 32.81 billion indian rupees ($379.42 million) for the quarter ended June 30, down from year-earlier 62.5 billion rupees ($722.75 million), which included a 27.3 billion rupee gain on a stake sale of its insurance subsidiary to Zurich Insurance (ZURN.S), opens new tab last year. On average, analysts had expected a profit of 35.82 billion rupees, according to data compiled by LSEG. The lender's net interest margin, a key gauge of profitability, fell to 4.65%, from 5.02% a year earlier, reflecting the impact of the Reserve Bank of India's recent interest rate cuts. When rates are lowered, banks typically pass on the benefits to borrowers first and only later reduce deposit rates, which can temporarily squeeze margins. Meanwhile, Kotak Mahindra Bank's asset quality deteriorated, with the gross non-performing assets ratio at 1.48% at the end of June, versus 1.39% a year earlier. Indian lenders have kept a tight lid on unsecured lending after grappling with higher bad loans in that segment, a move that has helped support asset quality. The bank's provisions for bad loans more than doubled year-on-year to 12.08 billion rupees. Net interest income grew 6% to 72.59 billion rupees in the first quarter. While credit growth has slowed across the industry, Kotak Mahindra Bank's loan book expanded 13%, driven mainly by a 16% rise in loans to retail consumers. ($1 = 86.4750 Indian rupees)
Business Standard
6 days ago
- Business
- Business Standard
RBI says domestic economic activity holding up
Reserve Bank Of India (RBI) stated in its latest monthly bulletin that domestic economic activity held up in June, with high-frequency indicators pointing to improving prospects of kharif agricultural season and continuation of strong momentum in the services sector. Growth in rural demand remained resilient and was accompanied by a recovery in urban economic activity. Amidst global economic uncertainties, the front-loading of spending by the central and state governments, with a focus on higher capex, is helping to offset some slowdown witnessed in private capex expenditure. Indias merchandise trade deficit narrowed in June 2025, due to contraction in both oil and non-oil trade deficit. Headline consumer price inflation or CPI inflation remained below the 4 per cent target for the fifth consecutive month in June, to fall to the second lowest inflation reading in the current CPI series.
Reuters
6 days ago
- Business
- Reuters
India's economy holding up despite global uncertainties, central bank bulletin says
MUMBAI, July 23 (Reuters) - India's economy continues to hold up against a global flux, dealing with the impact of geopolitical tensions and trade uncertainties, the Reserve Bank of India said in its monthly bulletin released on Wednesday. The RBI cut its key policy rate by a larger-than-expected 50 basis points last month and slashed the cash reserve ratio for banks as low inflation gave it room to focus on supporting growth amid volatile global conditions. India's economic activity remained resilient, helped by improving prospects for summer-sown crops, strong momentum in the services sector, and modest growth in industrial activity, the RBI said in its 'State of the Economy' article. "High-frequency indicators suggest stability in aggregate demand," the central bank said. India's retail inflation rate eased to 2.10% in June, a six-year low. "De-escalating geo-political tensions in the Middle East and optimism on trade deals" along with some loosening of regulatory norms for infrastructure financing buoyed financial market sentiment in the second half of June, the RBI said in the bulletin. However, in the first half of July, domestic investor sentiment remained cautious amidst ongoing uncertainty over a potential India-U.S. trade agreement and mixed corporate earnings in the quarter ending June, the central bank said.
Yahoo
07-07-2025
- Business
- Yahoo
Stable Indian government bond yields push investors towards more attractive corporate debt
By Khushi Malhotra and Dharamraj Dhutia MUMBAI (Reuters) -Indian mutual funds and insurance companies are shifting towards an accrual strategy to capitalise on higher corporate bond yields, as government bond yields are expected to remain largely stable, investors told Reuters on Wednesday. An accrual strategy focuses on earning returns primarily through interest payments, rather than through trading or capital gains. Fund managers are increasingly favouring shorter-duration bonds when yields are near the upper end of the range. The LSEG benchmark AAA-rated two-year and three-year corporate bond yields stood at 6.56% and 6.70%, respectively, on Monday. The spread between corporate and government bond yields in these two tenors has risen around 20-30 basis points over the past month to 85 bps. "As long as there is no danger of policy reversing, the two-three-year bonds will respond to local liquidity... so, we have already reallocated funds from the long bonds to the 2–3-year corporate bonds," said Sandeep Bagla, CEO at Trust Mutual Fund, which manages overall assets worth around 35 billion rupees ($408.00 million). The uptick in corporate bond yields has surpassed gains in government bonds since the Reserve Bank of India shifted its monetary policy stance and began withdrawing liquidity from the banking system. "In the context of present market conditions and macro-economic environment, we are cutting duration... I am positive on the shorter end as liquidity is likely to flow there," said Killol Pandya, senior fund manager for debt at JM Financial Asset Management, which manages debt assets worth about 38 billion rupees. "We have scaled back duration in our dynamic bond fund too," he said, noting that the company had gone from an exclusively government bond approach to strategically moving some funds to corporate bonds, towards the accrual system. While mutual funds are concentrating on the shorter end of the corporate bond yield curve, insurance companies are showing interest in longer-duration bonds. "We believe currently the most attractive part of the market is corporate bonds, especially the five-year to 10-year part of the curve," said Rahul Bhuskute, CIO at Bharti AXA Life Insurance. The spread between five-year and 10-year corporate bond yields and government bond yields remains in the range of 75-85 bps. ($1 = 85.7850 Indian rupees)
