The Banking sector - Emerging leaders!

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Topic: The Banking sector - Emerging leaders!

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omshivaya
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Joined: 06/Sep/2006
Location: India
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Posts: 5966

Posted: 13/Jan/2007 at 10:47pm

Shashi sir, very well explained. Ab woh "Yes Bank" wala aapka promise kab pura hoga...eagerly waiting whenever it comes

The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it

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kulman
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Joined: 02/Sep/2006
Location: India
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Posts: 9319

Posted: 13/Jan/2007 at 12:33pm

Shashi jee, that was very nicely explained in a simple, easy-to-understand way (and I wanted it specifically in lay-man's language).

Thanks a lot....to you as well as TED....

Life can only be understood backwards—but it must be lived forwards

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s_praharaj
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Joined: 10/Sep/2006
Location: India
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Posts: 357

Posted: 14/Jan/2007 at 9:26pm

Thanx Omshivayaji,

Today I was thinking to write my views about Yes Bank.

But some urgent work came up.

Please give me two days time, I will write my views on Yes Bank.

Shashi Praharaj

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omshivaya
Senior Member

Joined: 06/Sep/2006
Location: India
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Posts: 5966

Posted: 14/Jan/2007 at 11:05pm

Take your time Shashi sir, no hassles!

The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it

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xbox
Senior Member

Joined: 10/Sep/2006
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Posts: 2001

Posted: 14/Jan/2007 at 4:51am

Jai ho financial sector ki!! Some of financial/banking companies will become larger than dream. They are true wealth creator. I have liked this sector for long long time and for long long time ahead.

I just give one example here. In SK, house mortgage biz is 386 BUSD. Can you believe it ?? SK is small country with 40m ppl, one can imagine what can happen in India in years to come. What I gave just now is old fact. What I am going to state is something new I read last night.

As per one example, In US average mortgage age is 7 year. It mean that After 7 year, customer will either close the mortgage of sale the house. Assuming ROI is 6% and cost of money there being 4-4.5%. So it looks like NIM is aroung 2-1.5%. All looks logical and correct. But cruel reality is some thing different. Bank's NIM is not 1.5-2% but much more in reality. I give this exercise to some banker/volunteer to solve and let members know the fact....

A loan of 10 Lakhs at 10% taken by (Let's Basant jee) for 20 years. After 7 years, he fully pay the mortgage (assume no penalty).

1. How much Basant jee paid in interest for 7 years ?

2. Find out how much ROI Basant jee paid for 7 years for his 10 Lakh loan (clue: it is not 10%).

Answer to Second question will open every member's eye. Also calculate above for 30 year mortage term.

Edited by vipul - 14/Jan/2007 at 4:53am

Don't bet on pig after all bull & bear in circle.

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s_praharaj
Senior Member

Joined: 10/Sep/2006
Location: India
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Posts: 357

Posted: 15/Jan/2007 at 6:23pm

OmShivayaji,

I have written about Yes Bank, my observations.

I was slightly hesitant to write because while going through the post, I was observing that you are quite aware about what is happening in Yes Bank, more than me.

I have written some thing like this for the first time. so there may be mistakes. The financial figures given may not be 100% accurate, but they are almost near to accurate.

Thanx a lot for encouraging me to write.

Shashi Praharaj

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basant
Admin Group

Joined: 01/Jan/2006
Location: India
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Posts: 18403

Posted: 22/Jan/2007 at 10:23pm

Of late there had been considerable debate about how China’s ICBC had a market cap exceeding all the banks in India. I just checked up the numbers are the answers were quite revealing.

In Billion US $	Aggregate figure of Indian Banking Industry	ICBC
Total Market Cap	74	164
Total Advances	279	420
Average RoE	14.1%	13.8%
Average NPA %	1.2%	4.7%

1) It is true that China’s ICBC has a market cap exceeding that of all Indian Banks but the point is that their advances also exceed those of all Indian Banks. SO merely comparing the market cap of ICBC and making a case for investment into the PSU Banks could be misleading.

2) The average RoE of Indian Banks are better then those of the Chinese counterparts but what we need to see further is that Chinese Banks are laden with a very high Non performing loan (NPA)..

So we could make a case for investing in the SBI’s depending on whichever way we look at the glass but personally I feel that over the next 20 years all PSU Banks would lose market share to the emerging private sector Banks like HDFC Bank , ICICI Bank etc.

Edited by basant - 22/Jan/2007 at 10:26pm

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PrashantS
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Joined: 14/Oct/2006
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Posts: 1294

Posted: 22/Jan/2007 at 11:00pm

Do u think Banks like DCB and Yes bank wold be really great compared to these Big banks ..........or there may be a consolidation in this sector sooner or later???

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