India Earnings Season: Bank Results scared by the Rate/fx tuple (HDFC Bank Q1 FY 2014)

HDFC Bank 

HDFC Bank seems to have flashed a pretty good 26% NII on the wires for INR 44.4 Bln from loan spreads that remained a natty 4.6% in the quarter. The Loan book and Deposits have grown over and under 20% respectively to a book of INR 3 Tln each. The NII seems to be up 3% from the linked quarter in March. the bank’s NIM reporting was bumed up by new rules for apportioning of usual expenses employee pension liabilities and some commissions. Last quarter’s Fee income at iNR 1 Bln is likely static as profits came in at INR18.4 Bln adding to INR 18.8 Bln in April

The markets however do not seem to be rejoicing as the insurance FDI question is moot for the player with Standard Life and IPO plans both not firm for the bank. Yet, the markets continued sppoked by banks fixed income portfolios letting blood at the 100 bp move in yields from the 1 yr forward to 10 yr and at least at 8% + and rate cuts batted out of sight even before the FX scare by the Central Bank rushing into four such 25 bp cuts factored in barely 5 meets since March 2013

Recast loans are almost non extent as in Q1’s figure of INR 3 Bln and Non performing loans are as low as 0.3% of the book at less than INR  Bln from the wires

 

YES Bank on the wire?

YES Bank reports next week on Wednesday  and has been singled out for this rate move’s aftershock while

Indusind, when is it a good enough scale as competitor

Indusind reported a huge 50% jump in Net Interest Income at first glance from its new off take in retail lending finally trickling in . NII hit INR 6.80 Bln for the upstart and operating expenses moved up 5% over March at INR 5.08 Bln. Fee and Other Income was up 30% or nearly INR 1 Bln at INR 4.71Bln , Income before Tax rising 45% to INR 5 Bln over last year. Indusind has also brought down net NPAs to 0.2% and the gross NPAs at 1% of its rapidly growing INR 500 Bln book itself up 60% i the last 5 quarters. The ROA of the bank at 1.83% will be counted a s low for its still rudimentary book Bank reported NIMs of 3.72% on its retail book

What ails India’s Private Sector Insurance?

I know what sets me off against the winner of the bank wars 

Though HDFC Bank remains a perennial favorite of India bulls because of its efficiencies and hold over a high interest rate captive market for credit products, tit never ceased to amaze me that the LIC of the group, Standard life could not really stand up after being the most capitalised company in the sector. Of course with impending IPO norms and Reliance having beaten them to 5th rank when the crisis began, we do hope to look at some detailed Financial statements from these “new industry barons” soon, as a lot has been hidden inside the carpets by everyone with IRDA needing to be active in policing the instituions budding into a smaller pie every year. Now the public LIc and the private LICs divide the market 67:33 and this number would be even more in favor of LIC of India ( which had a INR 4 Trillion book this year or thereabouts and by assets already is 9 times the private players ) if the single insurance product not been sold heavily esp in Q1. Amazingly after Premiums of $1.3 bln the HDFC Standard Life team delivers a sixth rank and a $19 mln loss for the year following a negative $450million loss in FY09, and $69mln in FY10. what a shame!

Recovery has been slow and steady but we would continue to be hypercritical of any business that cannot want to publish a complete set of Financial statements Very frankly their size is not enough as an industry to believe that their hyper growth in the 1st 10 years will actually amount ot anything from here..Also without Unit products they have all stopped making any effective sales growth in this “industry” Indian Telcos are far more profitable whence Telcos historically wthe world over survive on high prices of hardware paid and lost volume churns ( which also they share with the LIC industry)

Life Insurance Corporation of India
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Insurance Tweets (India) :: Midweek Dropzone

  1. New players like Airtel and HSBC have been non-starters _TYY4less than 10 seconds ago from web
  • Other players falling behind include quasi Asset management peddlers like ICICI Prudential and WL players like New York Life _TYY4half a minute ago from web
  • LIC held 40% share in the new business in 2007 and 56% in 2009 _TYY42 minutes ago from web
  • Life Insurance Corpn alone holds a book of $64 billion in investments including double digit figures in unclaimed funds _TYY43 minutes ago from web
  • Additionally, 6 pvt Pension fund managers are mandated to run state owned and independent pension funds _TYY46 minutes ago from HootSuite
  • 16 private players in Life and 11 in non life _TYY46 minutes ago from HootSuite
  • Motor and Health makes 50-60% of the non-life Insurance segment _TYY47 minutes ago from HootSuite
  • Insurance in India had last grown to $41 billion in 2007, Life marking $36 b7 minutes ago from HootSuite
  • Indian Insurance: Bajaj Allianz, Metlife and Aviva safe in India till now _TYY412 minutes ago from HootSuite
  • The Foreign partner can bring up to 49%? Insurance Reform stuck in the middle _TYY413 minutes ago from HootSuite
  • AIG wants to sell off Indian Life Insurance stake – We’re safe with IRDA watching _TYY415 minutes ago from HootSuite
  • RT @zyakaira: Indian Insurance Market: DLF to get out of Insurance when buyer is available- AIG, Prudential turned down _TYY418 minutes ago from Plaxo Pulse
  • AIG wants to sell off Indian Life Insurance stake – We’re safe with IRDA watching18 minutes ago from HootSuite
  • Posted via email from The investment blog on Post

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