"What the government said looks more like a transient. If that is transient, then certainly there will be some impact in the shorter-term, but it may not translate into long-term impact. However, if it translates into a longer term impact then it would mean that margins of banks will take a hit and it will vary depending upon how they are positioned Asset Liability Management (ALM) wise," he elaborated.
He expects some impact of these steps on earnings of banks in the second quarter of FY14.
According to him, it will be difficult for banks to pass on higher costs to borrowers. Private sector lender Yes Bank has higher dependence on bulk deposits, which is a very price sensitive segment, so it will be at the higher end of the impact, he added.
Below is the verbatim transcript of his interview on CNBC-TV18
Q: Yes Bank stock is down 10-11 percent in two days but Yes Bank believes that they will not be affected at all and this is an overreaction while most brokers have lowered their estimates on Yes Bank and become more cautious since yesterday. Would you buy the management's contention?
A: The key issue is whether the measure by Reserve Bank of India (RBI) has a permanent impact or not. It is slightly becoming difficult to take the view now unless we have more guidance from the RBI and hopefully we will get that guidance when RBI announces its monetary policy end of this month.
Going by what the government said yesterday, it looks more like a transient. If that is transient, then certainly there will be some impact in the shorter-term but it may not translate into long-term impact.
However, if it translates into a longer term impact then it would mean that margins of banks will take a hit and it will vary depending upon how they are positioned Asset Liability Management (ALM) wise.
If you look at banks like Yes Bank and the other smaller banks like IndusInd Bank or other private sector banks, you would find that their reliance on bulk deposits or wholesale deposits are higher and that is a very price sensitive segment. That cost will move up.
We would think that banks will find it difficult to pass on higher costs to the borrowers.
So, without a pricing power on their lending side, we will have to assume that this will translate into margin impact. If we assume 50 bps increase on the bulk deposit component alone, then that would mean an impact on earnings anywhere between 1-5 percent and certainly Yes Bank will be at the higher end of the impact.
We have not done any changes as of now in terms of estimates for any of the banks but we are trying to see whether this is going to be a transient or whether it is going to be a longer term impact.
Anda sedang membaca artikel tentang
RBI steps to impact banks Q2; Yes Bank to be hard hit: IIFL
Dengan url
https://rokokkanker.blogspot.com/2013/07/rbi-steps-to-impact-banks-q2-yes-bank.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
RBI steps to impact banks Q2; Yes Bank to be hard hit: IIFL
namun jangan lupa untuk meletakkan link
RBI steps to impact banks Q2; Yes Bank to be hard hit: IIFL
sebagai sumbernya
0 komentar:
Posting Komentar