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Indian lenders are able to enduring any potential contagion results emanating from the U.S. banking turmoil and UBS’s latest takeover of embattled Swiss lender Credit score Suisse given their manageable exposures to their international counterparts, S&P International Rankings stated on Tuesday.
“Robust funding profiles, a excessive financial savings fee, and authorities help are among the many elements that bolster the monetary establishments we fee,” the score company stated.
S&P additionally stated Indian banks had enough buffers to resist losses on their sizable authorities securities portfolio as a consequence of rising rates of interest.
The Reserve Financial institution of India has elevated the coverage repo fee by 250 foundation factors since Might final yr.
Analysts have stated that Indian banks at the moment are in a greater place to resist stress given their present capital ranges and wholesome asset high quality.
Stress assessments carried out by the central financial institution and launched as a part of the Monetary Stability Report (FSR) in December have additionally proven that banks would be capable to adjust to minimal capital necessities even below opposed eventualities.
S&P stated that solely a major escalation of the present disaster would pressure it to alter its view.
Nonetheless, the choice to put in writing down Credit score Suisse’s extra tier-1 bonds to zero after the lender’s takeover by UBS might contribute to a better value of capital for home banks, S&P stated.
(Reporting by Siddhi Nayak; Enhancing by Savio D’Souza)
(Solely the headline and movie of this report might have been reworked by the Enterprise Commonplace employees; the remainder of the content material is auto-generated from a syndicated feed.)
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