Liquidity pressures faced by non-banking financial sector to continue amid weaker economic growth
5 years, 1 month ago

Liquidity pressures faced by non-banking financial sector to continue amid weaker economic growth

Firstpost  

Indian finance and leasing companies are likely to grow at a slower pace in 2020 than in prior years, amid weaker economic growth and liquidity constraints, it said. New Delhi: Liquidity pressures faced by the non-banking financial sector following the IL&FS failure are likely to continue though funding costs have come off the peak, Fitch Ratings said on Friday. “Liquidity pressures faced by the sector following the IL&FS failure are likely to continue, though funding costs have come off the peak.” Increasing competition to offset lower growth may weigh on profitability and test risk appetite. Certain asset classes could see weakening margins due to rising competition from banks, while funding costs are likely to stay high as market rates should remain volatile — given the liquidity strain, Fitch said.

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History of this topic

Liquidity Crunch Is Real. How Scheduled Commercial Banks Are Coping As Credit Growth Outpaces Deposit Growth
2 years, 2 months ago

Liquidity Crunch Is Real. How Scheduled Commercial Banks Are Coping As Credit Growth Outpaces Deposit Growth

ABP News  

A video is doing the rounds of social media, showing an official of Canara Bank, a Public Sector Bank, selling fixed deposits like a hawker in the streets of Mumbai suburbs in order to build up bank deposits. Both Canara Bank and HDFC Bank are actually on the ball as the slow deposit growth against the double-digit growth is creating …

Asset quality of Indiabulls Housing Fin, IIFL Finance vulnerable: Moody's
4 years, 1 month ago

Asset quality of Indiabulls Housing Fin, IIFL Finance vulnerable: Moody's

Business Standard  

Asset quality of Indiabulls Housing Fin, IIFL Finance vulnerable: Moody's The agency said Muthoot Finance the third non-bank finance company it rates is better positioned because of its focus on the gold loans business. Premium A modest loan growth and loan sales will help IIFL and Indiabulls maintain capitalisation despite the weakening of profitability Asset quality at non-bank lenders IIFL …

NBFCs will continue to face liquidity, asset quality risks: Fitch
4 years, 6 months ago

NBFCs will continue to face liquidity, asset quality risks: Fitch

Live Mint  

MUMBAI: India's non-bank financial companies will continue to face elevated liquidity and asset quality risks, even as economic activity picks up with the easing of the nationwide lockdown, according to global rating agency Fitch Ratings. Non-banks, facing a liquidity shortage ever since Infrastructure Leasing and Financial Services Ltd defaulted on its payment obligations, have been under renewed strain as banks …

Housing finance companies have enough liquidity to meet two months of repayments
4 years, 7 months ago

Housing finance companies have enough liquidity to meet two months of repayments

Live Mint  

MUMBAI: Housing finance companies have sufficient liquidity, which could cover about two months of debt repayments, excluding securitisation, said rating agency, Icra. “While the HFCs in the affordable housing segment have a higher share of portfolio under moratorium owing to the relatively marginal borrower profile, which may have been impacted more during the lockdown, they are carrying adequate liquidity to …

Covid-19: Fitch says Indian banks’ asset quality to worsen on lending pressure
4 years, 7 months ago

Covid-19: Fitch says Indian banks’ asset quality to worsen on lending pressure

Live Mint  

MUMBAI: Indian banks will see their asset quality deteriorate by 200-600 basis points for at least the next two years due to increased lending pressure to revive the credit flow in the economy, Fitch Ratings said on Thursday. The rating agency, in a report, said recent Reserve Bank of India measures, including an extension of the 90-day moratorium on recognition …

Economic package: Successful implementation of support measures for NBFI will be key, says Fitch Ratings
4 years, 7 months ago

Economic package: Successful implementation of support measures for NBFI will be key, says Fitch Ratings

Firstpost  

Fitch Ratings on Wednesday said support measures announced by the government for non-banking finance companies seek to ease borrower strain and boost funding conditions for NBFIs, but successful implementation will be the key New Delhi: Fitch Ratings on Wednesday said support measures announced by the government for non-banking finance companies seek to ease borrower strain and boost funding conditions for …

Asset quality pressures might return to haunt banks as lockdown stretch cashflows: Icra
4 years, 9 months ago

Asset quality pressures might return to haunt banks as lockdown stretch cashflows: Icra

Live Mint  

The slow growth in credit amidst the Covid-19 pandemic and an already slowing economy will add to profitability pressures for banks and create additional asset quality stress, said a report by rating agency Icra on Wednesday. Icra said that while a loan repayment moratorium, if provided by the Reserve Bank of India, could assuage asset quality concerns, the inherent stress …

Challenges ahead for most Indian non-financial companies in 2020: Moody's
5 years, 1 month ago

Challenges ahead for most Indian non-financial companies in 2020: Moody's

India TV News  

Driven by sluggish economic growth and slowing earnings, credit conditions will weaken for most Indian non-financial companies in 2020, Moody's Investors Service said on Thursday. "Upside factors for Moody's outlook on India’s non-financial companies include a ramp up of government’s stimulus measures aimed at reviving consumption demand, and better funding and market liquidity conditions whereby domestic demand and consumer funding …

Banks to face capital shortfall of Rs 3.5 lakh cr in event of systemic crisis in NBFC sector: Fitch Ratings
5 years, 2 months ago

Banks to face capital shortfall of Rs 3.5 lakh cr in event of systemic crisis in NBFC sector: Fitch Ratings

Firstpost  

New Delhi: Banks would face a capital shortfall of about $50 billion in the event of a systemic crisis in the non-banking financial company sector, according to a study by global rating agency Fitch. “The credit profiles of the state-owned banks would come under significant pressure, and the weakest – including those with Viability Ratings in the ‘b’ range – …

NBFC crisis: Liquidity steps for non-banking finance companies too little, too short-term, says Fitch report
5 years, 5 months ago

NBFC crisis: Liquidity steps for non-banking finance companies too little, too short-term, says Fitch report

Firstpost  

Mumbai: The government measures to provide partial credit guarantee to public sector bank on their asset purchases from NBFCs can ease funding pressure only for the short-term, says a report. In the budget, the government had said for purchase of high-rated pooled assets of financially-sound NBFCs, amounting to Rs 1 trillion during the current financial year, it will provide a …

IL&FS crisis' adverse impact on NBFC growth may lead to consolidation in sector: Fitch Ratings
5 years, 7 months ago

IL&FS crisis' adverse impact on NBFC growth may lead to consolidation in sector: Fitch Ratings

Firstpost  

New Delhi: The debt crisis in IL&FS has adversely impacted growth of the NBFC sector in India and might lead to its consolidation, said a report by Fitch Ratings on shadow banking. The Indian shadow banking industry’s rapid growth and reliance on short-term funding sources “bubbled over” in 2018, most evident by the default of Infrastructure Leasing and Financial Services …

Liquidity constraints faced by NBFIs to tighten credit supply: Moody’s
6 years, 1 month ago

Liquidity constraints faced by NBFIs to tighten credit supply: Moody’s

Live Mint  

New Delhi: Liquidity constraints faced by some non-bank financial institutions will tighten credit supply and slow growth to a little over 7 per cent for the current fiscal, Moody’s Investors Service said Thursday. “.The liquidity constraints faced by some NBFIs in India, after the default of Infrastructure Leasing & Financial Services Ltd in September 2018, will likely tighten overall credit …

Govt says some NBFCs face liquidity stress, puts pressure on RBI to ease
6 years, 2 months ago

Govt says some NBFCs face liquidity stress, puts pressure on RBI to ease

Live Mint  

New Delhi: A top Indian government official on Monday said the nation’s non-banking housing finance companies were facing liquidity stress, in comments that are likely to put more pressure on the Indian central bank to ease its policy towards the sector. The intervention by Corporate Affairs Secretary Injeti Srinivas came after Finance Minister Arun Jaitley and other government officials raised …

NBFC, housing finance stocks continue to slide on worries over liquidity constraints
6 years, 3 months ago

NBFC, housing finance stocks continue to slide on worries over liquidity constraints

Firstpost  

Shares of housing finance and NBFC companies had dropped as much as 23.5 percent on Tuesday, led by DHFL, on fears of a liquidity crisis. New Delhi: Shares of NBFC and housing finance firms continued to trade weak Thursday, plunging by up to 8.5 percent on worries over liquidity constraints. Can Fin Homes plunged 8.48 percent, PNB Housing Finance 7.29 …

What caused a rout in financial sector stocks
6 years, 3 months ago

What caused a rout in financial sector stocks

Live Mint  

The worst liquidity crunch in India’s banking system in more than two years is adding to refinancing risks for shadow banks shaken by a rare default in the country’s money markets. That’s making for a double whammy, as central bank steps to prop up a weakening rupee have sopped up liquidity and as recent corporate tax payments had already left …

Jaitley assures on liquidity to mutual funds, NBFCs
6 years, 3 months ago

Jaitley assures on liquidity to mutual funds, NBFCs

Live Mint  

The government will take all measures to ensure that adequate liquidity is provided to the NBFCs, the mutual funds and the SMEs, tweeted Finance Minister Arun Jaitley on Monday, reassuring the markets after stock and bond markets were rattled on Friday on concerns over defaults by IL&FS and fears of liquidity tightness in the financial system. India’s banking and markets …

Shares of housing finance firms crash sharply; DHFL tumbles 42% on massive selling over fears of a liquidity crisis
6 years, 3 months ago

Shares of housing finance firms crash sharply; DHFL tumbles 42% on massive selling over fears of a liquidity crisis

Firstpost  

New Delhi: Shares of housing finance firms came crashing sharply Friday, with Dewan Housing Finance tumbling up to 42 percent on massive selling over fears of a liquidity crisis, which had a cascading effect on the broader market as well. The scrip of Dewan Housing Finance Corporation went into a tailspin, nosediving 42.43 percent to end at Rs 351.55 on …

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