Banking stocks are trading in red after ratings agency Fitch has said that the progressive increase in minimum capital requirements under Basel III is likely to put nearly half of Indian banks in danger of breaching capital triggers.
Yes Bank is currently trading at Rs. 1210.20, down by 67.05 points or 5.25% from its previous closing of Rs. 1277.25 on the BSE. The scrip opened at Rs. 1254.35 and has touched a high and low of Rs. 1254.95 and Rs. 1201.55 respectively. So far 443488 shares were traded on the counter.
State Bank of India (SBI) is currently trading at Rs. 254.60, down by 9.40 points or 3.56% from its previous closing of Rs. 264.00 on the BSE. The scrip opened at Rs. 257.70 and has touched a high and low of Rs. 258.85 and Rs. 252.40 respectively. So far 774919 shares were traded on the counter.
Bank of Baroda is currently trading at Rs. 162.40, down by 9.50 points or 5.53% from its previous closing of Rs. 171.90 on the BSE. The scrip opened at Rs. 167.90 and has touched a high and low of Rs. 168.00 and Rs. 162.35 respectively. So far 522930 shares were traded on the counter.
Public sector banks are the most at risk, given their poor existing capital buffers and weak prospects for raising capital through market channels. The minimum total CAR is a prerequisite for payment of coupons on both legacy and Basel III perpetual debt capital instruments.
For Basel III perpetual instruments, coupon deferral is also linked to banks meeting both minimum regulatory common equity Tier 1 (CET1) ratio and Tier 1 ratio. More than half of the banks currently have a CET1 ratio that is below the required 8 per cent minimum that will be applied from FYE19.
Fitch estimates that Indian banks will require around $90 billion in new capital by FYE19 to meet Basel III standards. The state banks account for about 80 per cent of the total.
| Company Name | CMP |
|---|---|
| HDFC Bank | 799.90 |
| ICICI Bank | 1347.50 |
| Axis Bank | 1359.15 |
| Kotak Mahindra Bank | 383.50 |
| Indusind Bank | 853.15 |
| View more.. | |
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