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Banks May Face A Loss Of Rs 13000 Crore Due To Increase In Bond Yield

Bond Yields Today: All the banks in the country have...

Bond Yields Today: All the banks in the country have suffered huge losses due to the increase in bond yields. In the April-May-June (quarter), banks are expected to lose Rs 13,000 crore on their investments at the current market value. This information has been given by the Domestic Rating Agency (ICRA Icra).

Banks’ credit expected to increase by 11%
Icra has informed on Tuesday that profit was normal in the quarter ended June 30, 2022, but an increase in debt has been registered. According to ICRA, the profits of banks from operating profit are expected to remain constant in 2022-23. Banks’ credit is expected to increase by 10.1 to 11% in the year 2022-23.

understand the loss
According to the report, government securities are more in the investment portfolio of banks. Let us tell you that especially long term securities are more in this. Rising bond yields have added to the challenges of profiteering. In the April-June quarter of the current financial year, public sector banks may incur a loss of 8,000 to 10,000 crores on the bond portfolio. The same private sector banks may incur a loss of 2,400 to 3,000 crores.

this will affect
Anil Gupta, vice-president of domestic rating agency Icra, says that, despite the loss, considering the possibility of operating profit to grow by 11-12% in 2022-23, we estimate that banks’ profits will remain. The impact of ‘mark to market’ losses will be reduced as core operating profit increases. If the yield rises further in the times to come, there may be some impact on profits in 2022-23.

impact on loan demand
Credit growth for banks remains positive in the first quarter of 2022-23. This increase will be on all types of loans. Icra said that due to the increase in the interest rate, the demand for loans is expected to be affected in the coming times.

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