Page Three - Indian Banks

Last week, Indian banks started announcing their second quarter earnings with investors interested in how the companies are navigating the RBI’s new loan reclassification standards, and to what extent the slowdown in economic activity is impacting loan growth and margins.

Their results got off to an inauspicious start with Axis Bank, India’s third-largest private bank, announcing lower-than-expected earnings and sharply higher credit costs. The company announced net income of 4.3 billion rupees, lower than the 13.2 billion rupees reported by Bloomberg, with gross bad loans increasing to 5.9% of total lending, compared with 4.2 % the year before. Slippages more than doubled during the quarter with 50% coming from loans to the power and steel sector.