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Bank Industry Risk Analysis: India
Standard & Poors, Oct 2005
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
Abstract
The Indian banking sector retains a high-risk profile by global standards, although its outlook is stable. Recent banking reforms have tightened operational, prudential, and accounting standards, and have placed the system on the right track for becoming a stronger regulatory environment. Although the effectiveness of the Securitization Act and the Corporate Debt Restructuring mechanism have yet to be fully tested, these initiatives have improved the recovery of nonperforming loans. In terms of underlying profitability, Indian banks have posted a strong performance over the previous two-to-three fiscal years, owing to large treasury profits recorded amid a declining interest rate environment. With the current scenario of rates having risen, banks have returned to their core intermediary role of lending within the financial...
Companies mentioned in this report are: State Bank of India,Bank of Baroda (Unsolicited Ratings),Bank of India,Union Bank of India,Canara Bank (Unsolicited Ratings),Corporation Bank,Central Bank of India,Oriental Bank of Commerce,Punjab National Bank,Indian Overseas Bank
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