Seven of the 10 worst-performing bank stocks
globally are from Asia’s third-biggest economy, data compiled by Bloomberg
show. There are likely to be more dark days ahead as the lenders, already
battling with the world’s highest soured debt, face fresh challenges to their
asset quality from the slowdown in economic growth and the lingering crisis at
the shadow banks.
“It’s a
double-whammy for lenders as a slowing economy has added to their existing woes
with asset quality and fund-raising plans,” said Pritesh Bumb, an analyst at
Prabhudas Lilladher Pvt. in Mumbai.
At the top of the heap, of course, is Yes Bank Ltd.,
which has seen its shares crash 70% this year on concerns about the lender’s
thinning capital buffers and its sizable exposure to the cash-strapped shadow
lenders.
While
Yes Bank last week raised about $273 million selling shares to large investors,
the market remains jittery about its holding of pledged shares. The stock is
down over 25% this week after CG Power Ltd., in which the bank owns a 12.8%
stake, on Tuesday raised red flags over “suspect, unauthorized and undisclosed”
transactions.
IDBI
Bank Ltd. leads share price losses among state-run lenders, having slumped by
about 60% this year. The bank’s provisions for bad loans have risen for seven
straight financial years through March 2019, forcing it to set aside 192
billion rupees ($2.7 billion) last year -- an amount that almost equals its
current market value.
Source- Economic Times
Source- Economic Times