OTC MARKET NEWS Powered By Quantifi

S&P paints a grim picture for banks' equity offerings 

February 12, 2014
Business Standard

Rating agency Standard & Poor’s (S&P) on Monday said simultaneous equity issuances by many Indian banks and negative sentiment on emerging markets could pose challenges in raising capital.

This was evident in State Bank of India (SBI)'s recent equity-raising, which had to be aided by government-owned Life Insurance Corporation of India. Delays in raising capital could also limit loan growth for some public sector banks, S&P said. Banks need sizeable capital to support growth and meet Basel-III capital requirements. The private sector banks are better placed than their public sector counterparts in terms of meeting Basel-III requirements. Public sector banks would have to rely on a combination of government capital infusion and equity markets to support their capitalisation, it said, in its report titled: India Banking Outlook 2014: Little respite in sight.

S&P said the Indian banking sector would continue to suffer from pressures on asset quality, profitability and growth in 2014-15. This despite an uptick in the economy, pegged to expand at six per cent in FY15.

Read more: Business Standard

Comments are closed on this post.


Submit your email to receive our newsletter