Axis Bank well-placed to face downside risks due to tough conditions: S&P

 

Worldwide rating office Standard and Poor's (S&P) on Thursday said that Indian private loan specialist Axis Bank is very much situated to withstand drawback hazards from intense working conditions in India.

The bank's outcomes for the quarter finishing Sept 30, 2020 (Q2FY21) were versatile and in accordance with the rating viewpoint, said S&P.

Pivot Bank's development and income are probably going to beat those of public area banks, yet stay in accordance with its homegrown private area peers.

Bank's danger craving, which has been repressed in the course of recent months, is required to develop in accordance with the framework normal for the financial year finishing March 31, 2021. Nonetheless, it is all around situated to exploit an expected monetary bounce back and become quicker than the business normal in FY22 and FY23.

Hub Bank's resource quality ought to likewise stay in a way that is better than the framework normal throughout the following two years, regardless of a presumable weakening from the Covid-19 pandemic.

The rating organization expects Axis Bank's resource quality to stay in accordance with friends, for example, ICICI Bank, yet more fragile than that of HDFC Bank.

"Hub Bank has expanded its provisioning to cover misfortunes related with the pandemic. We anticipate that the bank should keep on proactively perceive and accommodate frail resources," the office said. The financial area will keep on confronting huge vulnerability throughout the following six to a year in the midst of the pandemic and unprecedented help allowed to borrowers.

Rebuilding will postpone acknowledgment of focused on advances in India's financial area. The area could see 5%-8% of its absolute credits being rebuilt before the finish of June 2021. What's more, nonperforming credits will increment to 10%-11% of the area's absolute advances, from 8.5% as of March 31, 2020.

Decoding the bullishness on ICICI Bank as other lenders follow caution

At a time when there is extreme cautiousness around banking stocks and analysts are downgrading their rating on the sector, not sparing even the frontline names, ICICI Bank stands out as an exception. For one, it hasn’t received any downgrade thus far and all analysts tracking the stock have a positive rating (a couple have hold) on it according to Bloomberg polls.

Also, seen in the larger context of one-year price correction, ICICI Bank’s 10 per cent decline fares better than HDFC Bank or Axis Bank’s 20 per cent and 41 per cent fall, respectively. That ICICI Bank was the last to join 2019’s rerating party also positions it favourably in the current wave of correction.

What seems to be blessing in hindsight is that, whether out of design or default given how it was battling with bad loans until 2018, ICICI Bank’s growth rate of around 12 per cent in the past four years, has been slower than that of HDFC Bank (over 22 per cent) or Axis Bank (over 15 per cent). Therefore, ICICI Bank’s calibrated growth rate may come handy (closer to past rates) when most others would be grappling to grow closer to their past trends, particularly on its retail side.

In fact, analysts expect the bank to fare relatively better in the near- to medium- tern. In a report on the sector, analysts at J M Financial say that the disruption caused by Covid-19 should see material pressure on multiple fronts for Indian banks. "While growth slowdown and jump in delinquencies is a given, it is critical to note that restoration of normalcy will be a long-drawn process," they note. While advising investors to remain underweight on the sector, the brokerage has only 2 buy recommendations – ICICI Bank and HDFC Bank, where they see relatively lower asset quality risks, a strong liabilities defence, high capital base and natural accumulation of market share once things turn.

Chanda Kochhar's plea against sacking has no legal ground: ICICI Bank to HC

Current Affairs
The Bombay High Court on Tuesday heard a request documented by previous ICICI Bank CEO Chanda Kochhar testing the legitimacy of her end by the loan specialist. The consultation occurred as the bank restricted a request by Kochhar to keep the issue part-heard before the prior seat of Justices Ranjit More and Surendra Tavade.
The bank is looking for recuperation of sums towards the clawback of rewards given to her from April 2006 to March 2018 after her end of administrations by the bank. Kochhar moved the high court on November 30, 2019, testing "end" of her work by ICICI Bank, which additionally denied her compensation for her supposed job in allowing "out of turn credits worth Rs 3250 crore to Videocon Group which profited her significant other Deepak Kochhar".
The bank had given a composite answer to the court on all the protests raised by Kochhar expressing that Section 35B of the Banking Regulation Act of 1949, under which she is looking for invalidation of the end of her administrations, is an "administrative arrangement". The Reserve Bank of India (RBI) had likewise said that its endorsement to the end was inside its ward and was given in the wake of thinking about the solicitation of Kochhar's previous manager. The bank has brought up the criticism that Kochhar's writ request isn't viable, that "it is a private financial organization and the writ appeal tries to challenge what are absolutely private authoritative terms". Consequently, the bank contended that Kochhar's writ request didn't have a lawful premise.
icici bank ICICI Bank

Prior in January, the Enforcement Directorate (ED) appended resources and money having a place with the Kochhar couple, which incorporated her South Mumbai loft at CCI Chambers, esteemed at Rs 3.5 crore (book esteem)...READ MORE

Falling deposits are the latest problem for Yes Bank after bad loans

Current Affairs
At the point when a previous YES Bank official began selling his stake in September, the loan specialist's top chiefs looked for any sign that the subsequent drop in share cost would trigger a hurry to pull back stores.
The stock deals came as clients of a local moneylender — Punjab and Maharashtra Co-employable Bank — were arranging outside its branches to pull back their cash following a supposed administration misrepresentation. Uncontrolled theory online about more extensive disease constrained the national bank to give uncommon proclamations guaranteeing the general population of the security of the money related framework. Indeed Bank's loss of mother and-pop stores in September was reasonable at last, however it highlighted a hazard for the moneylender whose peers HDFC Bank and ICICI Bank drew more reserve funds from clients during that period. India's fourth-biggest private bank has had a turbulent 2019 with another CEO incapable to raise the capital expected to support proportions that stand simply over an administrative least and control expert inquiries regarding its steadiness.
"It is currently an endless loop where an absence of capital is expanding worries on the bank's awful advances, making vulnerability among speculators and investors, which is adding to the withdrawal of minimal effort and retail term stores," said Ravikant Anand Bhat, an expert at IndiaNivesh Securities.

The moneylender's offer cost failed 74 percent a year ago as soured obligation mounted given its presentation to shadow banks ensnared in a drawn out smash in the nearby credit advertise. The dive has proceeded with this year, with shares dropping another 21 percent even as a benchmark file stayed minimal changed. The bank is because of report results for the December quarter, which will show whether stores dissolved further over the most recent three months of 2019....READ MORE

Former ICICI Bank CEO Chanda Kochhar skips ED date; to be summoned again

Company News

Former ICICI Bank CEO Chanda Kochhar Monday skipped her scheduled appearance before the ED in a money laundering case probe, citing bad health, officials said.
The probe involves the bank and the Videocon group.Chanda Kochhar will now be asked to depose later this week. She had not appeared before the agency even last week citing health reasons.
Official sources had told PTI earlier this week that the central probe agency is now mulling to call some more bank officials to confront them with the statements made by Chanda Kochhar and obtain further leads.The Enforcement Directorate (ED) had last month questioned and recorded the statements of Chanda Kochhar and her husband Deepak Kochhar over multiple sessions.
The agency is also preparing to analyse the details of assets of the Kochhars and others so that they can be provisionally attached under the Prevention of Money Laundering Act (PMLA).Chanda Kochhar's brother-in-law and Deepak's brother, Rajiv Kochhar, has also been grilled by the ED multiple times in the case.
The Kochhar couple have been questioned in the past too at the ED's zonal office in Mumbai after the central agency conducted raids on March 1.The searches were conducted at the premises of Chanda Kochhar, her family and Venugopal Dhoot of Videocon Group in Maharashtra's Mumbai and Aurangabad.

 The ED registered a criminal case under the PMLA earlier this year against Chanda Kochhar, Deepak Kochhar, Dhoot and others to probe alleged irregularities and corrupt practices in sanctioning Rs 1,875-crore of loans by ICICI Bank to the corporate group.This action of the agency was based on an FIR registered by the CBI.

PE fund AION fully exits Varun Beverages, walks away with 2x returns

Company News

Nearly three-and-a-half years after it invested $90 million in Ravi Jaipuria-promoted Varun Beverages, the bottlers for beverage giant Pepsi, private equity fund AION has decided to completely exit the company.

In a block deal, AION has sold its 4.5 per cent stake in the company at Rs 850 a share, a slight premium over the stock’s closing price of Rs 844.75 on the National Stock Exchange (NSE) on Tuesday. According to sources, this translates into a 25 per cent return on equity per year in dollar terms, or 2x returns over the holding period. The fund generated 2x on equity invested in the company. When contacted, Parth Gandhi, senior partner and managing director of AION, declined to comment on the transaction.

AION, a joint venture between Apollo Global Management and ICICI Venture, had invested $90 million in Varun Beverages — half of that in debt and half in convertible debentures.
In 2016, Varun Beverages came up with a Rs 1,100-crore initial public offering (IPO), which was subscribed 1.8 times at Rs 445 a share. After the company was listed, AION sold its stake in various tranches.

AION has so far invested in a number of Indian companies, the latest being Monett Ispat, the steel company it acquired as part of a consortium with JSW through the insolvency route, paying Rs 2457 crore for the deal. This year, it also acquired information technology (IT) and back-office operations of InterGlobe Technologies, the Rahul Bhatia company that runs IndiGo Airlines, for $230 million. In 2016, it also bought — along with partners like former Genpact chief executive Pramod Bhasin and GE commercial finance business head Anil Chawla — the commercial lending and leasing business of GE Capital for $360 million.


 Varun Beverages, the flagship company of the Ravi Jaipuria group, in February this year cemented its long-term relationship with PepsiCo.

Flipkart India's most preferred workplace; Amazon, Oyo come next: LinkedIn

Company News

Walmart-owned Flipkart is the most preferred workplace in India, followed by Amazon and Oyo in the second and third places, respectively, according to a list compiled by professional social media network LinkedIn.

Internet companies dominate the top 10 spots in LinkedIn's fourth edition of the '2019 Top Companies' list for India.

IT giant Tata Consultancy Services (TCS) made its debut at the seventh place, new entrants and homegrown internet and consumer services companies Swiggy and Zomato were ranked sixth and eighth, respectively.

Uber, another new entrant, took the fifth spot, while, One97 Communications was at the fourth rank and Oil and Energy conglomerate Reliance Industries was at the 10th place.

Others on the list include consulting firm Boston Consulting Group (BCG) at 13th, Yes Bank (14), IBM (15), Daimler AG (16), Freshworks (17), Accenture (18), Ola (19), ICICI Bank (20), PwC India (21), KPMG India (22), Larsen & Toubro (23), Oracle (24), and Qualcomm (25).

"This year, half the companies are new entrants on the list, including IT giants such as TCS and IBM that showcase the changing job and hiring landscape," said LinkedIn India Managing Editor Adith Charlie.

Charlie further said that "the presence of more blue chip Indian companies such as Larsen & Toubro and Reliance Industries, among others emphasises the fact that these large firms are getting better at attracting millennials employees".


 The report further noted that majority of companies on the list made maximum new hiring for engineering jobs followed by operations and business development.

Xiaomi enters digital payments market, expands handset manufacturing

Company News

Leading smartphone player Xiaomi has entered the fast-growing digital payments market with its Mi Pay service, the company announced on Tuesday. Primarily an UPI (Unified Payments Interface) —based mobile application, the Mi Pay service will be accessible to all MIUI — its mobile user interface — users in India.

The MIUI interface — spread across SMS, contacts, scanner, app vault, and settings in Xiaomi handsets — will also allow several utility payments ranging from phone bills, phone recharges, water or electricity bill payments through the payments service. The firm has partnered ICICI Bank as its payment service provider. Consumers can effectively make payments using UPI and other debit cards, credit cards and internet banking across 120 banks and over 120 billers, Xiaomi said.

“Mi Pay UPI has been approved by NPCI under the multi bank API model and it has been audited by CERT-IN empanelled auditors E&Y and Lucideus. Mi Pay provides the safest and secure transactions with all data stored locally in India servers in an encrypted format,” it said in a statement.

The move comes a year after the Chinese consumer electronics major had entered the digital lending space in India, with the launch of a ‘Mi Credit’ product, earlier in 2018. The company began offering instant personal loans to its users, through offers that appear on their lock screen while they are using the phone.

Adds seventh plant

 To match the growing demand for its handsets, Xiaomi has partnered Flex — an original equipment maker — that would manufacture smartphones for it in Tamil Nadu. The new Flex plant is the seventh plant to manufacture Xiaomi phones here. It already has six dedicated units from Foxconn and HiPad that are producing Mi and Redmi devices in India.

Videocon loan row: CBI lookout circulars against Chanda Kochhar and husband

Companies News:

The Central Bureau of Investigation (CBI) has issued lookout circulars (LOC) against former ICICI Bank chief executive and managing director Chanda Kochhar, her husband Deepak Kochhar, and Videocon Group's Venugopal Dhoot. The development comes weeks after the Enforcement Directorate (ED) registered a criminal case against them for alleged money laundering .

At the behest of the CBI, lookout circulars were issued against Kochhar's husband and Dhoot for all airports last year. According to The Economics Times, this is the first time LOC has been issued against Chanda Kochhar.

“LOCs were filed after the FIR and are mandatory in cases where such economic offences are alleged. In recent times, keeping an eye on travel plans is a top concern for regulators,” ET quoted the official as saying.

Earlier this month, ED had registered a criminal case for alleged money laundering against Kochhar, her husband, Venugopal Dhoot, and others, to probe alleged irregularities and corrupt practices in sanctioning a Rs 1,875-crore loan by the bank to the corporate group.

They said the central probe agency had filed an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act, taking cognizance of a CBI complaint filed on the matter last month.

An ECIR is the ED's equivalent of a police FIR.

The officials said the agency would probe if alleged kickbacks generated in the loan deal were laundered to create tainted assets.
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 The ED is soon expected to summon the accused named in the ECIR. The list of accused in the ED case is the same as that of the CBI, they said.

CBI closes in on Chanda Kochhar, husband in ICICI Bank-Videocon loan case

Finance News:

The Central Bureau of Investigation (CBI) has named ICICI Bank’s former managing director and chief executive officer (MD and CEO) Chanda Kochhar and her husband Deepak Kochhar, along with his firms, as “accused” in the Rs 3,250-crore Videocon loan case.

The first information report (FIR) registered on Thursday said the accused, including Videocon Industries (VIL) and its chairman and MD, Venugopal Dhoot, sanctioned certain loans to private companies in a criminal conspiracy and cheated ICICI Bank to the tune of Rs 1,730 crore.

Explaining the modus operandi, the CBI said ICICI Bank sanctioned credit facilities of Rs 3,250 crore to several companies belonging to Videocon group such as Trend Electronics, Century Appliances and others which were in violation of the Banking Regulation Act, Reserve Bank of India rules and the bank’s credit policy. The Rs 3,250-crore credit amount was part of a total loan of Rs 40,000 crore sanctioned to the Videocon group by a 20-bank consortium.


 The agency said it had investigated the quid pro quo where Dhoot made an investment of Rs 64 crore in Deepak Kochhar’s NuPower Renewables through his firm Supreme Energy (SEPL). Dhoot also transferred the same to Pinnacle Energy managed by Kochhar through a “circuitous route” between 2010 and 2012...Read More

ICICI Bank appoints 2 additional directors as part of board makeover

Finance News:

ICICI Bank appointed two additional independent directors continuing the attempt to improve the private sector lender’s reputation as well as governance standards.

“The board of directors of the bank at its meeting held today appointed B Sriram and Rama Bijapurkar as additional (independent) directors of the bank with effect from January 14, 2019, for a period of five years, subject to the approval of shareholders,” said the bank in a filing to the exchanges.

ALSO READ: Inspection of six cos linked to ICICI Bank controversy at ‘advanced stage’

Sriram was MD and CEO of IDBI Bank from June 30, 2018, to September 29, 2018. Previously, he was working with the State Bank of India (SBI) for 37 years after joining the bank as a probationary officer in 1981. He has held various key assignments within the bank and the group in credit and risk, retail, operations, IT, treasury, investment banking and international operations…Read More