Weak Credit Growth And Rate Cuts to Squeeze Profit at India's HDFC, ICICI Banks
Margins face pressure from the Reserve Bank of India's rate cuts — 100 basis points since the start of the year — and a reduction of the cash reserve ratio to boost liquidity and further reduce funding costs in order to buoy the economy.
The moves came as lending growth weakens, with gross bank credit growth hitting a three-year low in May. India's finance minister Nirmala Sitharaman asked government-owned banks to boost lending in order to fuel economic growth, according to Mint. Her ministry is also said to be considering issuing new banking licenses for the first time in almost a decade.
Efforts to shore up the economy are under way as the country is gradually recovering after a consumption slowdown last year. Firms like Nestle India Ltd. — due Thursday — should show an acceleration in revenue growth led by better product volumes.
Tariff concerns will cloud Infosys Ltd.'s Wednesday update after rival Tata Consultancy Services Ltd. said many American clients were cautious about tech investments given ongoing economic uncertainty. Shares in Tata Consultancy Services, HCL Technologies Ltd. and Tech Mahindra Ltd. all dropped after reporting earnings.
Highlights to look out for:
Saturday: HDFC Bank (HDFCB IN) and ICICI Bank (ICICIBC IN) profit growth is seen limited by thinning margins, as loans typically re-price faster than deposits when interest rates change. HDFC Bank said earlier in July gross advances grew 0.4% on the quarter, trailing deposit growth of 1.8%, as it continues efforts to bring down its loan-deposit ratio. HDFC Bank will also consider issuing bonus shares for the first time. Meanwhile, ICICI Bank is expected to set aside higher provisions as unsecured lending rises, raising asset quality risks, according to Bloomberg Intelligence.
Monday: Eternal's (ETERNAL IN) first-quarter profit is expected to halve on losses at its quick-commerce business Blinkit. The unit is investing in expanding its 'dark stores' network, where it services quick-commerce orders, and analysts will watch for updated guidance on when profits are expected. Strategic steer on its new 'Going Out' business will equally be in focus.
Tuesday: No major earnings.
Wednesday: Infosys (INFO IN) could lower or pull its revenue growth guidance as demand for new projects deteriorates amid worsening economic conditions, BI said. Watch for commentary on whether clients are canceling projects, especially in industries hit by US tariffs, Kotak Institutional Equities said.
Thursday: Nidec's (6594 JP) sales would likely be affected by uncertainties in the auto market, as demand for electronic parts and motors slow in Japan, according to BI. Founder Shigenobu Nagamori said the firm's appetite for takeovers remains intact, following its earlier decision to withdraw a $1.8 billion hostile bid for Makino Milling Machine Co.
Friday: No major earnings.
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Hindustan Times
37 minutes ago
- Hindustan Times
India ramps up US energy imports as Trump pushes balanced trade
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Time of India
an hour ago
- Time of India
From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners will pay a price
President Donald Trump 's tariff onslaught this week left a lot of losers - from small, poor countries like Laos and Algeria to wealthy U.S. trading partners like Canada and Switzerland. They're now facing especially hefty taxes - tariffs - on the products they export to the United States starting Aug. 7. The closest thing to winners may be the countries that caved to Trump's demands - and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run - even the United States, the intended beneficiary of Trump's protectionist policies. Explore courses from Top Institutes in Please select course: Select a Course Category MCA Data Science Degree Product Management Project Management others Finance Design Thinking Data Science Technology Operations Management Cybersecurity PGDM CXO Healthcare Leadership Management Public Policy Others MBA Data Analytics Digital Marketing healthcare Artificial Intelligence Skills you'll gain: Programming Proficiency Data Handling & Analysis Cybersecurity Awareness & Skills Artificial Intelligence & Machine Learning Duration: 24 Months Vellore Institute of Technology VIT Master of Computer Applications Starts on Aug 14, 2024 Get Details "In many respects, everybody's a loser here,'' said Barry Appleton, co-director of the Center for International Law at the New York Law School. Barely six months after he returned to the White House , Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America's enormous economic power to punish countries that won't agree to one-sided trade deals and extracting huge concessions from the ones that do. "The biggest winner is Trump," said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization . "He bet that he could get other countries to the table on the basis of threats, and he succeeded - dramatically.'' Live Events Everything goes back to what Trump calls "Liberation Day'' - April 2 - when the president announced "reciprocal'' taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% "baseline'' taxes on almost everyone else. He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs - all of which is now being challenged in court. Winners will still pay higher tariffs than before Trump took office Trump retreated temporarily after his Liberation Day announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate. Eventually, some of them did, caving to Trump's demands to pay what four months ago would have seemed unthinkably high tariffs for the privilege of continuing to sell into the vast American market. The United Kingdom agreed to 10% tariffs on its exports to the United States - up from 1.3% before Trump amped up his trade war with the world. The U.S. demanded concessions even though it had run a trade surplus, not a deficit, with the UK for 19 straight years. The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year - but lower than the tariffs he was threatening (30% on the EU and 25% on Japan). Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines. Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola's tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%. And while Trump administration cut Taiwan's tariff to 20% from 32% in April, the pain will still be felt. "20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate," Taiwan's president Lai Ching-te told reporters in Taipei Friday. Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he'd announced in April, but the damage may already have been done there. Bashing Brazil, clobbering Canada, shellacking the Swiss Countries that didn't knuckle under - and those that found other ways to incur Trump's wrath - got hit harder. Even some of the poor were not spared. Laos' annual economic output comes to $2,100 per person and Algeria's $5,600 - versus America's $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy. Trump slammed Brazil with a 50% import tax largely because he didn't like the way it was treating former Brazilian President Jair Bolsonaro, who is facing trial for trying to lose his electoral defeat in 2022. Never mind that the U.S. has exported more to Brazil than it's imported every year since 2007. Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu. Switzerland was clobbered with a 39% import tax - even higher than the 31% Trump originally announced on April 2. "The Swiss probably wish that they had camped in Washington'' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics . "They're clearly not at all happy.'' Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law. In May, the U.S. Court of International Trade, a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wend its way through the legal system, and may likely end up at the U.S. Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump's justifications for the tariffs. "If (the tariffs) get struck down, then maybe Brazil's a winner and not a loser,'' Appleton said. Paying more for knapsacks and video games Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who try to pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits - or risk losing market share in the United States. But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab. Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike , Mattel and Stanley Black & Decker, have all hiked prices due to U.S. tariffs "This is a consumption tax, so it disproportionately affects those who have lower incomes,'' Appleton said. "Sneakers, knapsacks ... your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.'' Trump's trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates. "The U.S. consumer's a big loser,″ Wolff said.
Time of India
2 hours ago
- Time of India
'Must remain alert': PM Modi's 'Swadeshi' appeal for Indians; days after Trump's 25% tariff
NEW DELHI: Prime Minister Narendra Modi on Saturday made a strong appeal for reviving the spirit of Swadeshi , urging Indians to prioritise locally-made products and stand united in the face of growing global economic uncertainty. Tired of too many ads? go ad free now Speaking at a public meeting in his Varanasi Lok Sabha constituency, PM Modi warned that the world economy is entering a phase of instability and unpredictability. His remarks followed a controversial decision by US President Donald Trump to impose 25 per cent tariffs on exports from nearly 70 countries, including India, echoing his inward-looking and hostile trade stance to impress his MAGA votebank. Trump's order is expected to deal a blow, even if not fatal, to Indian exporters, making goods costlier in American markets and threatening key sectors like engineering, textiles, and pharmaceuticals. Without naming the US directly, Modi cautioned that India must stay focused on its own economic interests as it moves toward becoming the world's third-largest economy. "As we talk about economic progress, I want to draw your attention to the current global scenario. The world economy is facing instability and uncertainty. In such times, countries are focusing solely on their own interests. India, too, is on the path to becoming the world's third-largest economy and must remain alert to its own economic priorities," PM Modi said. Calling for a nationwide movement to support indigenous industry, the Prime Minister said the time had come for every Indian, across political lines, to rise above partisanship and back the local economy. "This is not just about Modi saying it, every Indian should say this, if we want India to become the third-largest economy, every political party and every leader, keeping aside their hesitations, must work in the nation's interest and awaken the spirit of Swadeshi among the people," he said. Tired of too many ads? go ad free now PM Modi also said that the government is doing its part to support farmers, small industries, and youth employment, but stressed that national transformation cannot happen without citizen participation. "The government is doing everything possible in this direction. But as citizens, we too have responsibilities," he added. Making a direct appeal to shopkeepers and traders, PM Modi urged them to take a pledge to sell only Indian-made goods, especially with the festive and wedding seasons around the corner. "At a time when the world is going through uncertainty, let us take a pledge to sell only Swadeshi goods from our shops and markets. Promoting made in India goods will be the truest service to the country," he said. PM Modi futher urged people to be conscious consumers, asking them to reflect on the origins of every purchase. "Whatever we buy, we should ask ourselves, has an Indian toiled to make this? If it has been made by the sweat of our people, with their skills, that product is Swadeshi for us. We must adopt the mantra of 'Vocal for Local'," the PM said. Recalling earlier instances when families shifted wedding plans from abroad to India following his appeal, PM Modi said Swadeshi is not just an economic choice but a cultural and national statement. "The feeling of Swadeshi in every action will define our future. This will also be a true tribute to Mahatma Gandhi. Only through collective effort can we fulfil the dream of a developed India," PM Modi said.
