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印度共和国 Financials:RBI holds rates –high (liquidity卡

2019-12-03 作者:财经金沙平台   |   浏览(191)

In line with our economist’s expectations, the RBI kept the repo rate unchanged at 6.25%.

    However, the Statutory Liquidity Ratio (SLR) was cut from 20.5% to 20%. While for PSUbanks, the SLR cut is immaterial to their earnings as they hold SLR far in excess ofrequirement; for PVT banks, this is a small incremental positive to earnings as they canredploy the cash released into lending activities. Liquidity coverage ratio broadly remainsunaffected for most banks with this move.

    Liquidity, rates and creditSince demonetisation, the system has remained flush with liquidity of INR4-5trn. Thisresulted in banks sharply cutting deposit and lending rates, despite no repo rate action byRBI. PSU banks and PVT banks have cut their lending rate by 105bps and 90bpsrespectively. We therefore believe system rates will continue to move fairly independentlyof RBI’s stance until excess liquidity persists in the system. However, the situation ofexcess liquidity but muted credit growth continues, mainly driven by PSU banks.

    Currently, the surplus is ~INR3.5trn, while credit growth as of May remains low at 5.5%YoY as in addition to corporate banks' asset quality problems, demonetisation furtherderailed credit, including housing and consumer credit.

    Some resurgence in credit, but outlook muted for FY18Since March, we have seen some pick up in credit growth. While corporate creditdeclined just 1% YoY versus 5% in February, retail credit growth improved to 17% YoYfrom 12% in February, largely led by housing. This could possibly be the start of a slowreturn to normalisation of credit growth as remonetisation has been completed to a largeextent. However, uncertainties remain from GST implementation over the next fewmonths. With liquidity expected to remain high, there is a chance of further deposit andlending rate cuts, though we continue to expect only 7-8% credit growth as RBI and PSUbanks focus on resolving the large stress cases, while PVT banks continue to takeincrementally higher market share.

    Lastly, the RBI relaxed norms prospectively for housing loans with a ticket size of morethan INR3mn. We do not expect this to affect housing credit growth as the new norms onlyimpact higher ticket loans, which forms a fairly small percentage of housing sector credit.

    Importantly, we do not see this having a material impact on the affordable housing push.

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