Latest news with #NBFI
Mint
19-06-2025
- Business
- Mint
Big non-banking lenders in India are gaining trust and growing fast: Fitch Ratings
New Delhi [India], June 19 (ANI): India's non-bank financial institutions (NBFIs) are growing strongly, with large lenders leading the way, says Fitch Ratings. These institutions offer a wide range of financial services, and their credit ratings depend on how strong and stable their business models and finances are. According to Fitch, large NBFIs with a proven track record are earning more trust from investors and lenders. This growing confidence is helping them stay ahead of smaller players in the sector. By the end of September 2024, 17 major NBFIs tracked by Fitch had increased their share of the total loan market to 38 per cent, up from 30 per cent in March 2022. These leading lenders recorded an annual loan growth rate of 20 per cent during this period, much higher than the 9 per cent growth rate of the overall NBFI sector. These big NBFIs have also become financially stronger. Their debt-to-equity ratio -- a measure of how much they borrow compared to their own funds -- dropped from 4.5 times in 2021 to 4.3 times by mid-financial year 2025. This improvement came from raising more capital and keeping profits within the business, especially during the COVID-19 pandemic. Lower debt levels help reduce the risk of financial trouble if loan repayments slow down. Fitch expects this trend to continue, with most NBFIs using their earnings to fund future growth rather than paying out large dividends. Despite slower global economic growth, India's NBFI sector continues to expand. The sector includes a wide variety of companies offering different types of loans. In cities, competition is tough for secured loans like home or car loans. But in rural areas, some NBFIs face less competition from banks. However, higher costs and greater credit risks in rural lending can affect profitability, depending on how well the loans are managed. Fitch also highlights that the type of loans an NBFI focuses on plays a big role in its success. Those with deep experience and large operations in specific segments tend to have more stable and sustainable businesses. Many NBFIs lend to non-prime customers -- people who may not get easy loans from banks -- which can help them earn higher margins, unless banks enter the same market. Large NBFIs benefit from their size and strong market position. They usually have better access to funding, more control over pricing, and lower costs. Those that lead in their lending areas are better able to manage risks and stay profitable, even during economic ups and downs. Companies backed by large corporate groups may also get easier access to funds and benefit from group support.
India Gazette
19-06-2025
- Business
- India Gazette
Big non-banking lenders in India are gaining trust and growing fast: Fitch Ratings
New Delhi [India], June 19 (ANI): India's non-bank financial institutions (NBFIs) are growing strongly, with large lenders leading the way, says Fitch Ratings. These institutions offer a wide range of financial services, and their credit ratings depend on how strong and stable their business models and finances are. According to Fitch, large NBFIs with a proven track record are earning more trust from investors and lenders. This growing confidence is helping them stay ahead of smaller players in the sector. By the end of September 2024, 17 major NBFIs tracked by Fitch had increased their share of the total loan market to 38 per cent, up from 30 per cent in March 2022. These leading lenders recorded an annual loan growth rate of 20 per cent during this period, much higher than the 9 per cent growth rate of the overall NBFI sector. These big NBFIs have also become financially stronger. Their debt-to-equity ratio -- a measure of how much they borrow compared to their own funds -- dropped from 4.5 times in 2021 to 4.3 times by mid-financial year 2025. This improvement came from raising more capital and keeping profits within the business, especially during the COVID-19 pandemic. Lower debt levels help reduce the risk of financial trouble if loan repayments slow down. Fitch expects this trend to continue, with most NBFIs using their earnings to fund future growth rather than paying out large dividends. Despite slower global economic growth, India's NBFI sector continues to expand. The sector includes a wide variety of companies offering different types of loans. In cities, competition is tough for secured loans like home or car loans. But in rural areas, some NBFIs face less competition from banks. However, higher costs and greater credit risks in rural lending can affect profitability, depending on how well the loans are managed. Fitch also highlights that the type of loans an NBFI focuses on plays a big role in its success. Those with deep experience and large operations in specific segments tend to have more stable and sustainable businesses. Many NBFIs lend to non-prime customers -- people who may not get easy loans from banks -- which can help them earn higher margins, unless banks enter the same market. Large NBFIs benefit from their size and strong market position. They usually have better access to funding, more control over pricing, and lower costs. Those that lead in their lending areas are better able to manage risks and stay profitable, even during economic ups and downs. Companies backed by large corporate groups may also get easier access to funds and benefit from group support. Fitch says that when it rates NBFIs, it looks at how stable their business is, how much risk they take, how strong their finances are, how easily they can raise money, and how well they follow rules. (ANI)
Reuters
12-06-2025
- Business
- Reuters
Watch out for dollar FX fall more than 'de-dollarization'
LONDON, June 12 (Reuters) - Evidence of "de-dollarization" around the world remains scant, but many major investors fear a gradual drawback from U.S. assets is now inevitable and the dollar's exchange rate may have to fall further to clear the market. The debate about the U.S. dollar's dominant role in global trade, reserves and investment portfolios has smoldered for decades, but it has reached a crescendo during the turbulent first few months of President Donald Trump's second term in the White House. European Central Bank boss Christine Lagarde, opens new tab recently put a spotlight on this shift in market thinking, noting "highly unusual cross-asset correlations" involving simultaneous drops in the dollar, Treasuries and U.S. stocks after Trump's import tariffs announcement in April. But despite all of the de-dollarization noise, there are still no clear indications of a mass withdrawal from dollar assets at large. In fact, some investors dismiss these fears altogether given the pattern of the past 10 years. Bank of America strategist Ralph Axel argues that despite all of the speculation, the world has actually been "rapidly dollarizing" over the past decade - at least in the sense that dollar liabilities have expanded enormously. In a research report on Thursday, Axel points in particular to the growth of the so-called shadow banking system, otherwise known as "Non-Bank Financial Intermediation", or NBFI, and refers to the universe of investment funds, private credit firms and even crypto funds that exist outside the regulated banking system. All dollar liabilities are effectively "money" in the sense that they can be sold for dollar cash and are thus ultimately claims on the Federal Reserve. Some of these liabilities are direct claims, such as U.S. Treasuries, but there are a blizzard of indirect claims through uninsured deposits, mortgage and corporate debt and investment fund shares. Dollar liabilities have clearly ballooned in the past decade. The U.S. federal debt has increased four-fold in less than 10 years to some $36 trillion, while bank deposits have more than doubled to $18 trillion since 2008. And, as Axel points out, the total size of "shadow banks" has also more than doubled since 2009 to roughly $63 trillion, according to S&P Global data. While much of this expansion simply reflects asset price appreciation, Axel notes that "the NBFI system can only grow because of demand for its liabilities." The point of all this number-crunching is to undermine the simplistic de-dollarization narrative. If de-dollarization were truly accelerating then fewer, not more, U.S. liabilities could be created, whether from the government, traditional lenders or shadow banks. And the trend has clearly been the other way. "A big selling wave can move prices and exchange rates temporarily but does not de-dollarize," he wrote. "As a result, we think the de-dollarization theme is less threatening, especially given what appears to be a stronger trend of global dollarization over time." In other words, the exchange rate of the dollar can fall even if dollar assets are not contracting. A weakening exchange rate simply signals that temporary demand for dollar assets is declining and a lower dollar sticker price is needed to clear the market. "We would caution investors to not miss the dollar story for the dollar trees," the Bank of America strategist concluded, in reference to the confusion between exchange rates and the ubiquity of dollars and dollar assets. Of course, the trends of the last 10 to 15 years may have crested, and that's precisely this year's concern. Questions about the dollar exchange exposure were also raised by Deutsche Bank's currency research team this week in a deep dive into the hedging behavior of the world's big pension and insurance funds with the heaviest overseas assets holdings. They showed that Nordic, Dutch and Australian institutional funds had more than 50% of their investment portfolios invested abroad, with Japan's and Switzerland's foreign holdings also high at above 30%. They concluded that most of these investments are in the U.S. and much of the currency risk is not being hedged, meaning exposure to the U.S. dollar is likely historically high. But as these funds' hedging activity is now increasing, they reckon, it should pressure the dollar exchange rate lower. All of which raises an important, albeit circular, question. To what extent was the performance of U.S. assets exaggerated in recent years by investors assumption of an ever-rising dollar and a hedge against global shocks? And was the dollar just rising because of that outsize overseas demand for U.S. stocks and bonds? And, on the flip side, to what extent could a weakening dollar now cause demand for those assets to fall? What market pricing near mid-year suggests is that even if de-dollarization fears are overblown, the dollar's exchange rate may be a necessary safety valve. The opinions expressed here are those of the author, a columnist for Reuters.
Zawya
15-05-2025
- Business
- Zawya
Egypt: Beltone Holding reports $55mln in revenues in net profit for Q1 2025
Egypt - Beltone Holding has announced strong financial results for the first quarter (Q1) of 2025, with consolidated operating revenues reaching EGP 2.8bn—a 2.2x increase year-on-year. Net profit surged to EGP 703m, marking a 1.4x year-on-year growth. The Group's total outstanding lending portfolio also saw significant growth, more than doubling to EGP 30.2bn. Commenting on the results, Group CEO and Managing Director Dalia Khorshid said: 'Our Q1 performance underscores the strength of our data-driven growth strategy and resilient business model. These results set a solid foundation for what we aim to achieve in 2025 and beyond. With a second historic capital increase recently concluded, we're entering the next phase with renewed confidence, supported by the trust of our shareholders and the market.' Beltone's non-banking financial institutions (NBFI) platform delivered robust performance, with operating revenue rising to EGP 2.3bn—more than double the div from Q1 2024. This growth was driven by new product launches and increased market share, supported by strong results across leasing, factoring, mortgages, consumer and microfinance, venture capital, and the newly introduced SME financing. Meanwhile, the investment banking platform recorded EGP 531m in operating revenue, also reflecting a 2.2x year-on-year increase. The investment banking division posted a standout performance with revenues jumping 6.7x year-on-year, highlighting the growing momentum across its expanded offerings. Securities brokerage and asset management together contributed 50% of the platform's total revenue.
