Latest troubles at Credit score Suisse Group might be somewhat extra related from an Indian perspective than the meltdown at Silicon Valley Financial institution, as it’s the 12th largest international financial institution in India. Nonetheless, provided that international banks maintain solely 6% of whole banking property, it may not be a related determine to impression the banking sector in any means.
Credit score Suisse has Rs 20,700 crore in whole property in India as of March 2022. As per Jefferies, Credit score Suisse has just one department in India which accounts for a 1.5% market share amongst all international banks’ whole property and represents 0.1% of property of the general banking sector. Seventy % of those property are in authorities bonds, that are largely brief time period in tenure. The lender has zero non-performing loans.
Of whole property, Rs 1,900 crore are in type of money and financial institution steadiness, Rs 900 crore in money credit, overdrafts and loans, and Rs 14,600 crore within the type of authorities bonds, amongst others. Twenty high debtors account for 99.9% of the financial institution’ s whole loans.
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As per Jefferies information, the financial institution’s whole borrowings in India stand at Rs 12,200 crore, forming about 73% of whole liabilities. “Whereas the share of shorter-term liabilities is excessive, property are largely in liquid G-Secs. On this context, we be aware that in 4Q22, the worldwide buyer deposit base of the financial institution contracted by 37% QoQ to CHF 233 billion (Swiss Franc) and whole property contracted by 24% QoQ to CHF 531 billion,” it famous.
“Given the relevance of Credit score Suisse to India’s banking sector, we see softer changes in evaluation of counter-party dangers, particularly within the derivatives market. We count on the RBI to maintain a detailed watch on liquidity points, counter-party exposures and intervene as vital. This may occasionally additionally result in institutional deposits shifting extra in direction of bigger/ high quality banks,” Jefferies mentioned.
The highest-five international banks in India are: HSBC with Rs 2.47 trillion of property, Citibank with Rs 2.33 trillion of property, Normal Chartered with Rs 1.75 trillion, Deutsche Financial institution with Rs 1.48 trillion and JP Morgan with Rs 90,900 crore in whole property as of March 2022.
