RBI strengthens tools to intervene in ailing Indian banks

The Reserve Bank of India's (RBI) updated "prompt corrective action" (PCA) framework could suggest a greater willingness to take regulatory action to address problems at struggling banks, but its implementation is only likely to be effective if it is matched by credible plans to address banks' significant asset quality issues and capital shortages, says Fitch Ratings.

Cyber risk is a growing threat to financial institutions`says Fitch

Cyber-attacks against financial institutions are an increasingly significant risk, says Fitch Ratings. The global rating agency said that cyber risk is a growing threat that can adversely affect credit ratings as attacks can compromise customer data and disrupt websites, with detrimental financial or operational consequences for individual issuers and financial systems.

Related reputa

Revised PCA rules to impact NPA laden PSBs: Fitch Ratings

A report has said that RBI's updated `prompt corrective action' (PCA) rules can potentially impact more than half of the NPA-laden state-run banks. Commenting on the issue, a Fitch Official told the media, "More than half of state-owned banks would breach at least one of the new thresholds, mainly owing to high NPLs, based on their latest financial reports."


Waiver scheme may raise Indian tractor loan delinquencies, says Fitch Ratings

Delinquencies on tractor loans could rise in several Indian states as a result of political pressure for farmers to be granted waivers on agricultural loans, says Fitch Ratings. According to the rating agency, the media reports that farmers' loans may be waived are likely to create moral hazard and credit discipline issues, given that there will be an incentive for farmers to skip loan repa

SBI's proposed debt less likely to default at BBB- by Fitch

Fitch Ratings has assigned SBI's proposed debt instruments with a less default likelihood at BBB-(EXP) rating, reported PTI. The debt instruments constitute direct, unconditional, unsubordinated and unsecured obligations of SBI. Issue is expected to be of three year tenor and the notes are to be issued by SBI's London branch.

These instruments are rated at the same level of ba

Fitch assigns 'BB(EXP)' rating to JSW Steel proposed USD Notes

Fitch Ratings has assigned a 'BB(EXP)' expected rating to India-based JSW Steel Limited's (JSWS, BB/Negative) proposed US dollar senior unsecured notes, which the company states will be used for repaying foreign-currency debt, capex or any other purpose in accordance with regulations.

“The final rating is subject to the receipt of final documentation conforming to in

Fitch Ratings downgrades long-term issuer default ratings on BILT

Fitch Ratings further downgraded the long-term issuer default ratings on paper maker Ballarpur Industries Ltd (BILT) and its subsidiary Bilt Paper BV to a more speculative grade, reported PTI. Citing severe liquidity constraints and inevitable default, the agency said it has downgraded ratings on BILT and its subsidiary "to C from CCC".

In January, Fitch had downgraded BILT

Crunch week as Fed meets on rates, Trump team joins G20

By William Schomberg

LONDON  - After a year that tipped conventional wisdom on its head, the coming week might suggest a return to some sort of normality for the global economy -- or instead take investors into a whole new round of uncertainty.

On the face of it, Wednesday's expected interest rate hike by the Federal Reserve would be a clear sign th

'Indian banks run risk of skipping coupon payments'

Global credit rating agency Fitch Ratings on Thursday said some Indian banks are at the risk of skipping coupon payments on capital instruments over next couple of years.

According to Fitch, some Indian banks are at risk of skipping on obligations despite the pressure easing measures by the Reserve Bank of India (RBI), additional capital infusions into government owned banks.

Some Indian banks risk skipping coupon payments - Fitch Ratings

MUMBAI  - Some Indian banks are at risk of skipping coupon payments on their capital instruments despite recent easing of rules by the central bank and capital injection by the government into state-run lenders, Fitch Ratings said on Thursday.

Mid-sized banks are the most at risk of breaching capital triggers, the agency said. A Fitch analysis showed total capita

India's official Q3 GDP growth data surprising: Fitch

 American agency Fitch Ratings on Tuesday expressed surprise at the official Indian statistician's latest projection of 7 per cent GDP growth in the third quarter ended December, saying it contradicted data on real services activity hit by demonetisation.

"This number looks somewhat surprising as real activity data released since demonetisation pointed to weak consumptio

Fitch affirms NHPC at 'BBB-'; withdraws Ratings

Fitch Ratings has affirmed state-run hydro power producer NHPC the Long-Term Foreign and Local-Currency Issuer Default Ratings (IDRs) at 'BBB-' with stable outlook -- reflecting its robust operating and financial profile, reported PTI. At the same time, Fitch has chosen to withdraw the ratings of NHPC for commercial reasons, Fitch Ratings said in a statement.

According to stat

Bad bank may push India loan clean-up, says Fitch Ratings

The creation of a 'bad bank' could accelerate the resolution of stressed assets in India's banking sector, but it may face significant logistical difficulties and would simultaneously require a credible bank recapitalisation programme to address the capital shortfalls at state-owned banks, says Fitch Ratings.

According to Fitch Ratings, India's banks have significant a

Fitch India affiliate sees banks' core capital needs at $13.6 billion by March 2019

MUMBAI - India's banks will need 910 billion rupees ($13.6 billion) in Tier-1 capital until March 2019 to grow at a bare minimum pace of 8 to 9 percent on average, India Ratings and Research said on Wednesday.

Of the total capital needs, 500 billion rupees will have to come from additional Tier-1 bonds, the rating agency, an affiliate of Fitch, said.


Finance Minister reels off statistics, says data call for rating upgrade

Citing sound macroeconomic parameters, finance ministry officials on Tuesday pitched for a rating upgrade in their meeting with global rating agency Fitch, reported PTI. The officials also sought to understand how it rates sovereigns as rating agencies have been denying an upgrade citing stress on balance sheets of both banks and corporates.

The ministry also explained the representat

Donald Trump administration poses risks to global sovereigns, says Fitch Ratings

The Trump Administration represents a risk to international economic conditions and global sovereign credit fundamentals, says Fitch Ratings. According to the global rating agency, US policy predictability has diminished, with established international communication channels and relationship norms being set aside and raising the prospect of sudden, unanticipated changes in US policies with pote

Oil firms` merger will face big challenges: Fitch Ratings

The proposed merger of the Indian state-run oil and gas companies would face significant execution challenges in managing integration of employees, addressing overcapacity in the merged entity and getting support for the merger from private shareholders, US rating agency Fitch Ratings said on Tuesday.

"A merger would face significant execution challenges, particularly in terms of

Statutory reserve decision avoids Indian AT1 market pain: Fitch Ratings

The Reserve Bank of India's decision to allow Indian banks to use their statutory reserves to pay coupons on Basel III Additional Tier 1 (AT1) instruments avoids potential damage to sentiment in India's domestic AT1 market, which would have made it even harder for banks to raise the large amount of new capital that they require over the next two years, says Fitch Ratings.


Global bank rating trend still negative in 2H16, says Fitch Rating

Global bank rating trends were negative again in 2H16 as downgrades outnumbered upgrades for the fifth consecutive six-month period, says Fitch Ratings. Again, there was a significant number of rating changes - we changed 62 bank Issuer Default Ratings (IDRs) in 2H16 following 65 revisions in 1H16.

Emerging markets (EMs) dominated the IDR changes with 28 downgrades and 25 upgrades, co

Indian budget sustains slow consolidation, signals reform: Fitch Rating

The Indian government in its Union Budget 2017-18 continued with gradual fiscal consolidation and signalled its continued commitment to a broad reform agenda, with a greater focus now on widening the tax base, according to Fitch Ratings.

“The target of reducing the central government's fiscal deficit to 3.0 per cent of GDP has been pushed back by another year, but the genera

Vodafone, Idea merger won't ease Indian telco competition: Fitch Ratings

A planned merger between Vodafone Group Indian subsidiary and Idea Cellular should help them withstand intense price competition in the Indian telco market, but is unlikely to lead to increased pricing power for operators in the short term, says Fitch Ratings. We retain our negative outlook on the sector, as fierce competition and rising capex will put pressure on most operators in 2017, said t

Demonetisation to impact banks` asset quality: Fitch Ratings

The demonetisation of high value currencies (Rs 500 and Rs 1,000) and the subsequent cash crunch is expected to push back the asset quality recovery of Indian banks, said Fitch Ratings.

Fitch also said stressed-asset ratio for Indian bank predicted to increase to 12 per cent for the current fiscal earlier, is expected to go up further. Last fiscal the ratio was 11.4 per cent.

Property sales in India to fall by 20%-30% in 2017: Fitch Rating

Fitch Ratings, a global rating agency, expects property sales in India to fall by at least 20 per cent-30 per cent in 2017, owing to disruption caused by demonetisation and general caution on the part of buyers. Homebuilders already have high levels of unsold inventory and are likely to cut selling prices as demand weakens.

We expect risks to homebuilders to rise further this year, wi

Indian small auto borrowers face pressure due to demonetization: Fitch Rating

Demonetization appears to have had a negative impact on Indian auto-loan repayments, based on collection reports from Fitch-rated securitization transactions. Small auto-loan borrowers have been affected the most, says Fitch Ratings.

According to Fitch Ratings, demonetisation is likely to have had a detrimental effect on the income and cash flows of commercial vehicle operators, which

Global ratings outlook weaker than last year, says Fitch Rating

Global rating outlooks are more negative than a year ago across most rating sectors, Fitch Ratings says in its latest global credit outlook report. "The greatest challenges are undoubtedly faced by emerging market issuers in all sectors, but this is a global trend - the outlook bias is also negative for developed-market entities across the majority of sectors," said Monica Insoll, Man