×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

The Mint Report for 9 November 2011

The Mint Report for 9 November 2011
Comment E-mail Print Share
First Published: Thu, Nov 10 2011. 12 09 AM IST

File Photo
File Photo
Updated: Thu, Nov 10 2011. 12 09 AM IST
File Photo
India’s banking industry has received a downgrade from a leading rating agency. On Wednesday Moody’s Investor Service cut its outlook for the Indian banking sector from “stable” to “negative.” It said lower growth was hurting asset quality and profitability. The agency also added that government borrowing was eating into funds for private borrowers. Moody’s says the effects of the slowdown will become apparent over the next one-and-a-half years. It added that banks would be forced to hike their provisioning during this fiscal and the next one. Not surprisingly, banking shares tumbled during the day. ICICI Bank fell 2.16% on the BSE to 861.75 on a day the Sensex went down 1.18%. And HDFC Bank lost 1.50% to 477.45.
Even as Moody’s delivered its verdict on India’s banks, the country’s biggest lender reported its quarterly numbers. State Bank of India reported a 12.36% growth in net profit for the second quarter to Rs2,810 crore. That was on a 28% increase in net interest income toRs10,420 crore. Even better, its net interest margin jumped to a record 3.79% compared to 3.43%. Some of SBI’s rivals have reported even higher profit growth in the second quarter, largely on the back of high loan demand. SBI’s profits also beat most expectations, but all was not well. The bank’s non-performing assets have increased to 2.04% from 1.7% in the year-ago period. With the Moody’s downgrade also coming in, investors fled from shares of SBI, sending them plunging 6.76% to 1,862.50.
In other news, Indian IT giant Tata Consultancy Services has bagged a mega deal in the U.K. On Wednesday it announced its fully-owned subsidiary Diligenta had won a $2.2 billion contract with financial services firm Friends Life. The contract will involve handling 3.2 million Friends Life policies for 15 years. It will come into effect on 01 March 2011. This is the second largest contract TCS has ever won. Back in 2008 it got a $2.5 billion deal with Citigroup. But the cost of that deal included $504 million to buy out Citigroup’s back office in India. Shares of TCS climbed 1.77% on the BSE to 1,123.
Comment E-mail Print Share
First Published: Thu, Nov 10 2011. 12 09 AM IST