The U.S. regional banking sector is experiencing a surge in resilience as several mid- and small-cap banks exceeded third-quarter earnings expectations. This positive trend, driven by robust net interest income and stable credit quality, suggests a promising outlook for the sector in 2025. Investors are increasingly optimistic, with regional bank stocks outperforming the broader market and analysts anticipating further upside potential.
PSU stocks experienced a significant decline today due to stricter regulations proposed by the Reserve Bank of India (RBI) on projects under implementation. The RBI’s guidelines mandate a 5% general provision for all existing and new project loans in the construction phase, with provisions gradually decreasing to 1% under certain conditions when projects enter the operational phase. This news led to a sell-off in PSU stocks, with companies such as Power Finance Corporation (PFC), Rural Electrification Corporation (REC), and Indian Renewable Energy Development Agency Limited (IREDA) witnessing declines of up to 13.6%. PSU banks like Canara Bank, Punjab National Bank, Bank of Baroda, and Bank of India also witnessed sharp falls of over 5%. The Nifty PSU index fell 4.3% to 7,202 points, and the BSE PSU index dropped 3.4% to 19,760 points, with 54 constituents trading in the red.
The Central Board of Indirect Taxes and Customs (CBIC) has implemented a common audit plan for banks to streamline the process for both central and state level Goods and Services Tax (GST) officials. This plan provides guidelines for audit officers to follow, ensuring efficiency, transparency, and coordination. The move offers greater certainty to banks regarding audit procedures, reducing inconsistencies across the country. This unified approach aligns with the collaborative efforts between the central and state governments to make GST audits more uniform and predictable.
Shares of State Bank of India (SBI) witnessed a strong rebound after intensified buying in the PSU segment on Thursday, leading to a new lifetime high of 806 per share. Experts attribute the rise to strong buying in PSU stocks and the potential benefits to large banks like SBI from RBI’s recent guidelines on Kotak Mahindra Bank. SBI is anticipated to deliver robust Q4 results in 2024, further fueling its share price growth.
European stock markets exhibited a mixed performance on Thursday as investors weighed a deluge of significant corporate earnings. Notable movements included a 0.4% decline in Germany’s DAX, a 0.3% drop in France’s CAC 40, and a 0.4% gain in the U.K.’s FTSE 100. The banking sector was in focus, with Deutsche Bank reporting a better-than-expected profit increase, while Barclays’ profit fell less than anticipated. Unilever’s sales surpassed expectations, while Nestle’s sales declined due to a downturn in the North American market. M&A activity was also evident, with Anglo American’s stock surging 13% after BHP Group offered to acquire the miner. Elsewhere, Meta Platforms’ gloomy earnings outlook weighed on the European session, sparking a sell-off in tech stocks. German consumer confidence improved slightly, suggesting a gradual recovery for the Eurozone’s largest economy. Finally, oil prices rebounded after U.S. crude inventories unexpectedly dropped, while gold and EUR/USD edged higher.
Deutsche Bank has reported a 10% annual increase in net profit attributable to shareholders, reaching €1.275 billion ($1.365 billion) in the first quarter of 2024. This surpasses the €1.23 billion forecast by analysts. Revenue also grew by 1% to €7.8 billion, driven by gains in commissions, fee income, and fixed income and currencies. Other highlights include net inflows of €19 billion in Private Bank and Asset Management, a decline in credit loss provision to €439 million, and a CET1 capital ratio of 13.4%. The bank’s transformation plan, which aims to cut 3,500 jobs and achieve operational efficiencies of €2.5 billion, remains ongoing.
Axis Bank has reported a significant surge in its financial performance for the quarter ended in March 2024, registering a net profit of Rs 7,130 crore. This remarkable turnaround follows a net loss of Rs 5,728 crore during the corresponding period last year. For the entire fiscal year, the bank’s net profit soared to Rs 24,861 crore, reflecting a substantial 160% growth compared to the previous year.
The Indian government, SBI Cards and Payment Services Ltd, and telecom operators are collaborating to develop a solution to address the increasing threat of cyber fraud and phishing attacks in the banking sector. The solution involves monitoring both the registered address and geolocation of customers where a one-time password (OTP) is delivered. Any inconsistency between the two locations will trigger an alert to customers about a potential phishing attempt. This measure aims to strengthen the second factor of authentication for digital payment transactions, which has been compromised by sophisticated OTP theft techniques employed by fraudsters.
