Download Unicorn Signals App

By EquityPandit

EquityPandit

EquityPandit
BANKING

Bank of Maharashtra Jumps on Higher MCLR Rate by 20-30 bps

Bank of Maharashtra's Total income rose 7% yearly to Rs 4,317 crore in Q2FY23.

After the bank announced the higher marginal cost of fund-based lending rates (MCLR) by 20-30 basis points, the Bank of Maharashtra soared at 8.12% to Rs 35.30 across different tenors w.e.f today (December 14, 2022).

The overnight MCLR increased to 7.5% from 7.3%, and MCLR for December rose to 7.7% from 7.5%, a 20 basis point.

For three months, the interest rate on MCLR was raised to 7.9% from 7.6%, followed by the six-month MCLR rate increased to 8% from 7.7%, and the one-year MCLR rate was raised to 8.2% from 7.9%, a 30 basis point. Today, the revised rates will be effective.

On a standalone basis, the net profit rose at 102.93% to Rs 535 crore in the second quarter of FY23 compared to Rs 264 crore posted in FY22. Total income hit a high at 7% yearly to Rs 4,317 crore in the second quarter of FY23 over in the second quarter of FY22.

The Government of India held a 90.97% stake in public sector banks at the end of the September quarter.

Get Daily Prediction & Stocks Tips On Your Mobile


I would like to receive communication from EquityPandit via sms, email, whatsapp, Google RCS for offers, updates etc.
BANKING

SBI Loans to be Costlier as Bank Hikes Key Lending Rate

Nilesh

State Bank of India (SBI) has announced a 10 basis point (bps) hike in the marginal cost of fund-based lending rate (MCLR) across the tenor. The new rates will come into effect from February 15. MCLR is the lowest rate at which a bank can lend money to its customers.

The Reserve Bank of India (RBI) established MCLR in 2016 to determine lending rates for various loans. It usually follows the same trajectory as the RBI Monetary Policy Committee (MPC).

The increase in SBI’s MCLR comes a few days after the Reserve Bank of India’s MPC announced on February 8 that it would hike the repo rate by 25 basis points to 6.5%.

“The MPC believes that further adjustments to monetary policy actions are necessary to keep inflation expectations stable, break the persistence of core inflation and strengthen medium-term growth prospects. Accordingly, the MPC decided to raise the policy repo rate by 25 basis points to 6.50″ The Monetary Policy Committee will remain vigilant on the changing inflation outlook to ensure that it remains within tolerance and is gradually aligned with the target,” RBI Governor Shatktikanta Das said in a statement.

Despite a cumulative rate hike of 250 basis points, inflation has exceeded the Reserve Bank of India’s tolerance ceiling of 6%. India’s retail inflation rose to 6.52% in January. It was 5.72% in December. Wholesale inflation, however, has fallen to a two-year low of 4.73%.

Many banks, including Bank of Baroda, Bank of India and Punjab National Bank, also hiked their key lending rates after the repo rate hike. SBI is the latest to join the list.

The overnight MCLR rate has been raised by 10 basis points to 7.95%, according to the SBI website. 10 basis points boost the one-month MCLR from 8% to 8.10%.

The three-month MCLR has improved to 8.1% from 8% in January. The six-month MCLR is now 8.4%, compared to 8.3%.

The new rate has been raised to 8.5% for one-year terms from the previous 8.4%.

For two-year terms, MCLR has been raised from 8.5% to 8.6%, while for three-year terms, it has been raised from 8.6% to 8.7%.

BANKING

AU Small Finance Bank Hikes Rates on Term Deposits and Savings Accounts

Nilesh

AU Small Finance Bank (SFB), India’s largest Small Finance Bank (SFB), has announced an increase in interest rates on term deposits and savings accounts from 12 December.

According to a press release, the bank has raised the maximum FD rate on retail deposits by 25 basis points to 7.75% for regular customers from the existing 7.5% and 8.25% for senior citizens from 8%. The bank had hiked the FD rate on retail deposits by up to 60 basis points in October 2022.

AU Small Finance Bank has also raised the savings deposit rate to 7.25% per annum for savings accounts with balances between Rs 1 crore and Rs 10 crore.

AU Small Finance Bank Executive Director Uttam Tibrewal commented on the rate hike: “Following the recent series of repo rate hikes announced by RBI, we have increased FD and savings rates to maximise the benefits of our customers.”

BANKING

Kotak Mahindra Bank Raises MCLR by 10 Bps

Nilesh

On Wednesday, Kotak Mahindra Bank raised its marginal cost of fund-based lending rate (MCLR) by ten basis points. So, the lender’s one-year MCLR is 8.55%, according to the information on its website. The short-term MCLR is in the range of 7.8-8.4%, while the two- and three-year MCLRs are 8.85% and 9.05%, respectively.


The bank has boosted MCLR by 90 basis points since June. After the Reserve Bank of India (RBI) raised its repo rate by 50 basis points in September, the bank raised lending rates by 20 basis points each in June and July and another sizable hike of 25 basis points in October. So far, RBI has raised the repo rate by 190 basis points since June.


69% of the bank’s total loan book is linked to floating rates, with 53% linked to the External Benchmark Related Lending Rate (EBLR) and 16% linked to MCLR. The portfolio of loans linked to fixed rates accounted for 31%, of which 22% were loans with maturities of less than one year. In addition, to boost lending rates, banks are also raising deposit rates to support credit growth. Kotak Mahindra Bank has a high CASA ratio of 56% and has locked out savings account deposits into long-term deposits, leading to a 16% YoY growth in retail term deposits in 2QFY23.

BANKING

Bank Credit Beats Deposit Growth at Busy Biz Cycle

Nilesh

In India, the Banks are beholding a high credit growth associated with deposits. The credit growth has closely been turned to double the growth in deposits in the current financial year. This can principally be accredited to a busy business cycle.

As of the September-end quarter, the bank credit growth mounted at 16.5%. Meanwhile, deposits rose by 9.2%, per the RBI data.

“Credit growth has further enhanced to 18% as of October 21, while deposits endure growing at 9.5%. But rather than gauge up deposit growth, banks are falling back on their speculation and cumulative their ratio of credit to deposit. Most banks have elevated their credit-deposit ratio to ended 80%,” said a TOI report.

It is important to note that even after the dominant situation, banks aren’t scrambling for retail deposits. The Indian banks were uncertain about how long credit growth will endure and are taking a guarded method by raising interest rates through limited-period proposals.

The country’s major lender SBI has seen its credit rise by 20% as of September-end compared to opportunities of 12% at the year’s commencement.

SBI Chairman Dinesh Khara said that although bank credit is increasing twice as fast as deposits, SBI has a huge base of deposits.

As per Khara, the busy season was the chief factor leading to this growth. According to the media report, the SBI chairperson assumes overall credit to grow by 14% to 16% in this financial year. He called infrastructure, renewable power, oil marketing companies and services the foremost credit drivers.

Deposits growth has always been a concern for lenders. According to Bank of Baroda MD Sanjiv Chadha, the scenario regarding the deposit rates is yet to stabilise.

BANKING

Kotak Mahindra Bank Plans to Hire 20 Investment Bankers to Bet on M&A Recovery

Nilesh

The investment banking unit of Kotak Mahindra Bank is planning to expand its business by hiring about 20 bankers, betting that deal activity will rebound next year.


S Ramesh, MD and CEO of Kotak Investment Banking, said the increase would represent a 25% increase in its investment banking division, which currently has 80 people. He said the company was looking to fill analyst-to-director-level positions in financial services, healthcare and technology, where overseas companies such as Amazon and Walmart could look for investment opportunities. Electric vehicles and renewable energy may also be of interest.


“We expect global strategic companies to start firing their engines to consolidate their diversified presence in India,” Ramesh said in an interview in Mumbai. “We expect 2023 to outnumber 2022 mergers and acquisitions.”


India has $168 billion in pending and completed deals this year and is on track to set an annual record, as compiled by Bloomberg show. HDFC Bank Ltd’s $58 billion all-stock takeover of Housing Development Finance Corp led to the surge. Gautam Adani, India’s richest man and the world’s third-richest man, spearheaded the $10 billion acquisition of the local cement business of Holcim AG, the country’s second-largest company.


Another factor that could drive deal flow in India is the willingness of financial investors to write big checks for acquisitions, Ramesh said. He added that a new generation of leading family-owned businesses was also more willing to sell, while conglomerates were looking to consolidate to position themselves for future growth.


On the IPO front, Kotak Investment Banking expects to raise as much as Rs 750 billion ($9 billion) by 2023. According to data compiled by Bloomberg, the company has raised about $5.8 billion this year through its first share sale in India, led by Life, worth $2.7 billion, a product offered by Indian insurers.


According to its website, Kotak Investment Banking provides services including equity and debt capital market offerings, M&A advisory and private equity advisory. The company, through its affiliate, bought a stake in India’s largest hospital chain, Max Healthcare Institute Ltd, in a $1.1 billion block deal for KKR & Co. Kotak was also one of 10 advisers to manage the LIC IPO in May, the largest IPO in Indian history.

@2025 - www.equitypandit.com. All Right Reserved.
Latest
IPO
Weekly
Outlook

Stock
Market
Prediction