India banks to boost sales of Basel bonds
Banks turn to bonds as rising bad debt, poor earnings spoil prospects for equity sales
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Mumbai
INDIA'S banks will ramp up sales of bonds that act as capital buffers in 2015 as lacklustre earnings and rising soured loans make share sales tough, Fitch Ratings Ltd says.
State-owned lenders in Asia's third-biggest economy issued 122.5 billion rupees (S$2.6 billion) of Basel III notes in 2014, a fraction of the more than US$85 billion in similar securities sold by banks in China, according to data compiled by Bloomberg. Bad debts as a proportion of Indian banks' total advances are at least the highest in eight years and capital sales of as much as 840 billion rupees may be required next fiscal year to shore up balance sheets, according to ICRA Ltd, the local unit of Moody's Investors Service.
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