I think they are pointing out at IL&FS and DHFL here. More provisioning for these exposures could come in coming quarters.
I think it is ADAG cos. and DHFL -
Iirc, IDFC bank didn’t have any/much exposure to IL& FS
Yes.Looks like that. On a lighter note, the only relief in this case is that, ADAG has got his MOTABHAI to bail him out if need occurs whereas in case of IL&FS there is no such BHAI available.
IDFC First Bank Ltd board approves enabling resolution for raising Rs. 5000 crores
The Board of Directors (‘the Board’) of IDFC First Bank Ltd at its meeting held today i.e. May 10, 2019 has approved enabling resolution relating to issue of Debt Securities up to an amount not exceeding Rs. 5,000 crore (Rupees Five Thousand Crore only) on Private Placement basis for a period of one year from the conclusion of 5th Annual General Meeting of the Bank, within the overall borrowing limits of the Bank, subject to approval of the shareholders of the Bank and other applicable statutory/regulatory approvals.
Shares of IDFC First Bank Ltd was last trading in BSE at Rs.49.25 as compared to the previous close of Rs. 48.45. The total number of shares traded during the day was 1098209 in over 1759 trades.
The stock hit an intraday high of Rs. 49.6 and intraday low of 48.55. The net turnover during the day was Rs. 53824604.
The two key factors I have been monitoring is
- Retailing of Balance Sheet both on Asset Side through retail loans of various ticket size as well as Liability side through CASA
- Cost/ Income percentage which is extremely high and may not soften quickly as the bank expands branches to nearly four times. Hopefully e banking will help also.
there is much expectation from Vaidyanathan that he will move away from wholesale and infrastructure funding .
Looks like disappointing results to me and will be a significant gap down opening today. Few things which really disappointed me- 1. increase in Gross NPA. Why didnt all the probable loss accounts treated as NPA in dec 2018 at the time of merger. This way, it would have been much cleaner slate to start with. 2. How come company reported losses in retail banking segment whereas wholesale banking was in profit. 3. Even treasury business made losses. 4. Loan growth is low compared to the expectations.
^ No exposure towards IL& FS n jet airways.
Question remains how much more provisioning is left out ? IDFC bank is in fast expansion mode which will require a lot of capital. Hence it appears that IDFC bank will take a few more quarters to show good results.
Disclosure: IDFC bank is 5 percentage of PF.
Seems like next qtr there will not be any more provisioning on these accounts ( Seems like management is confident ).
5616 crore of stressed account. ( 5.09% stressed asset ).
2800 crore ( which is not part of stressed account, but management is prudent and have taken 15% provision - bit scary), This is not IL&FS / Jet airways. This is mostly rel capital / DHFL…
Disc : 25% portfolio is invested in IDFC first bank and Waiting.
Fully Believe in Vaidyanathan, He will make it a better bank as years go by.
Please visit their new website, they are updating new features frequently…
loans up to 100 per cent of vehicle cost, zero processing fee, down payment of ₹999, and extended loan tenure of 48 months
Does this not sound like subprime?
One of the major contributors to subprime was balloon loans where the borrower got an enticing very low initial interest rate/payment (and of-course lack of credit-worthiness check or the credit check showed that the borrower could only pay that low EMI), which ballooned in an year or so to the really un-affordable real EMI.
Hope they check credit-worthiness for the real EMI thoroughly and not indulge in balloon-loans. This has the makings of sub-prime.
Capital first had very good data processing and analytical ability… they have well credit check policies in place. So hoping that this wont lead to subprime loans from the contract but they must adjust the risk in to returns…
Does anyone have the credit suisse report?