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Bank Results season: India FY 2010

DCB has come in with another $200m loss in Q4, making it one of the few times, investors have supported a restructuring story that is much rather taking the ship down, because the results are one of the first few and the losses have receded from their abysmal levels in the previous quarter. While the market action today is weak ( or strongly negative) because of the GS overhang and global markets falling like nine pins have affected the India story

While SBI and Kotak are yet to announce dates for their results, ICICI Bank comes on the calendar for Wednesday and IDFC comes on 27th before HDFC Bank reports in the first week of May. We keenly follow SBI and PNB for their performance in Fixed Income. MNC Banks like SCB, HSBC and Cit ihave reached asset book size of INR 1 Trilllion while BofA in India had been aising its exposure to India in the last quarters, reporting an exposure of $1 billion added in the last quarter in its global results last Friday

State Bank subsidiaries (nine including Indore, Hyderabad, Travancore and Mysore) are likely to be consolidatd with SBI in this year and the government has already moved to approve a international lCaptal raising of $4-5 billion for SBI. RRBs are also getting an infusion of $3.5 billion according to the Finance Bill. New Banks have been permitted in India while FDI proposals are allowed to the extent of 74% including portfolio investment of 25%. FDI to the extent of $4.5 billion has come in net additions in India in January to March, of which $3 billion is in secondary market investments also regulated by the FIPB, and $1.5 billion has come in divestments and other IPOs

India infrastructure Investment vehicle IL&FS are going in for a 10% stake dilution to increase Tier I equity by $300 million in th Domestic Capital Markets.

The credit policy announcement in 2 days is likely to go for both SLR and CRR increases of at least 50 bp, we were the first to see the writing on the wall here back in October.

FII stakes have gone up in IDFC(44% from 31%) , Axis Bank( 33% from 23%) , State Bank of India (10% from 8%) during the Jan-March quarter when the Sensex remained at the same levels (

Meanwhile the Securities Services market is expected to grow bank business in India catering to local and global Prime brokerage and Custody Portfolios and Portfoli Management esp for agents like BNY Mellon, State Street, SocGen and J P Morgan

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