Woes and Worries

Mutual fund managers have plenty of concerns and fresh bad loans are right on top

The country is reeling under a liquidity crisis and you know it’s not getting any better when the central bank goes all out to ease liquidity – the RBI recently lowered the repo rate by a quizzical 35 basis points. While the transmission of lower rates to borrowers is in question, the June quarter performance of lenders has been better than other sectors. “Net interest income (NII) of 10 BFSI companies (Nifty constituents) grew by 14.3% YoY, whereas net profit grew by 149.9%,” states a Centrum Research report. A low base effect, clean-up of balance sheets and recapitalisation by the government has led to this outperformance.