AIRLINK 172.85 Decreased By ▼ -2.88 (-1.64%)
BOP 13.22 Increased By ▲ 0.10 (0.76%)
CNERGY 7.42 Decreased By ▼ -0.12 (-1.59%)
FCCL 43.48 Decreased By ▼ -0.43 (-0.98%)
FFL 14.91 Decreased By ▼ -0.10 (-0.67%)
FLYNG 26.50 Decreased By ▼ -0.40 (-1.49%)
HUBC 129.40 Decreased By ▼ -0.83 (-0.64%)
HUMNL 13.30 Decreased By ▼ -0.04 (-0.3%)
KEL 4.45 Decreased By ▼ -0.05 (-1.11%)
KOSM 6.00 Decreased By ▼ -0.06 (-0.99%)
MLCF 55.40 Decreased By ▼ -0.63 (-1.12%)
OGDC 213.30 Decreased By ▼ -1.47 (-0.68%)
PACE 5.89 Decreased By ▼ -0.09 (-1.51%)
PAEL 41.15 Increased By ▲ 0.25 (0.61%)
PIAHCLA 16.64 Increased By ▲ 0.32 (1.96%)
PIBTL 9.58 Decreased By ▼ -0.17 (-1.74%)
POWER 11.56 Decreased By ▼ -0.20 (-1.7%)
PPL 179.20 Decreased By ▼ -2.28 (-1.26%)
PRL 33.80 Decreased By ▼ -0.42 (-1.23%)
PTC 22.85 Decreased By ▼ -0.21 (-0.91%)
SEARL 94.10 Decreased By ▼ -1.62 (-1.69%)
SILK 1.18 Increased By ▲ 0.04 (3.51%)
SSGC 35.02 Decreased By ▼ -0.43 (-1.21%)
SYM 15.79 Increased By ▲ 0.04 (0.25%)
TELE 7.83 Decreased By ▼ -0.04 (-0.51%)
TPLP 10.83 Decreased By ▼ -0.15 (-1.37%)
TRG 60.79 Increased By ▲ 0.29 (0.48%)
WAVESAPP 10.68 Decreased By ▼ -0.13 (-1.2%)
WTL 1.33 Decreased By ▼ -0.02 (-1.48%)
YOUW 3.80 Increased By ▲ 0.03 (0.8%)
BR100 12,052 Decreased By -1.3 (-0.01%)
BR30 36,449 Decreased By -17.8 (-0.05%)
KSE100 113,936 Decreased By -420.4 (-0.37%)
KSE30 35,133 Decreased By -214.2 (-0.61%)

The Reserve Bank of India has allowed banks to spread their bond trading losses, a change that is likely to boost profitability of lenders as well as spur a rally in stock and bond markets. Under the change, lenders can spread bond-trading losses incurred in the December 2017 and March 2018 quarters equally over up to four quarters will come as a major reprieve to India's state-run banks, which have been hard hit by trading losses from a spike in bond yields over recent months.
State-run banks, which are struggling under a burden of provisioning for record levels of bad loans, have been further hit by mark-to-market losses on their huge bond holdings due to a sustained spike in bond yields since July.
Last month, Credit Suisse warned that India's state-run banks could lose more than 200 billion rupees ($3.1 billion) in the January-March quarter, due to a continued spike in bond yields and as they held more bonds than are required by the regulator. Indian bond yields rose by 67 basis points in the October-December quarter, their steepest since a currency crisis in September quarter of 2013 pushing banks to provide capital for massive mark to market losses and in turn leading state banks, the largest set of bond investors to stay away from buying.

Copyright Reuters, 2018

Comments

Comments are closed.