Last month, a poll by ratings agency Moody's found that 70% of investors in Hong Kong see India's banking system as the most vulnerable in south and southeast Asia. "I wonder what the remaining 30% were smoking," says Andy Mukherjee on Bloomberg Gadfly.
The state of Indian lenders "depleted capital levels in state-run banks and an inability to shed soured corporate debt even in non-state-controlled ones" is revealed in their latest earnings. Bad debts now total $191bn and counting.
It's not all bad HDFC has built a "formidable retail franchise", for example, and is poaching the best corporate clients from struggling state-run lenders. Yet at least when state banks struggle, the government fires their CEOs, says Una Galani on Breakingviews.com.
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Private-sector banks Axis and ICICI "ran into trouble lending to sectors such as power and infrastructure, where companies overestimated demand and projects overran", but neither have fired top management. In the US, heads would have rolled. "Corporate leaders in India rarely get the chop and... shareholders seldom apply sufficient pressure to force change."
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Should you invest in UK equities?The FTSE 100 hit a record high this week, but UK equities remain unloved and undervalued compared to their global and US peers. Should you snap them up at a discount?
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State pension errors: DWP urged to check for mistakes among divorced peopleFormer pensions minister Steve Webb says there are a high number of divorced women on low state pensions. Now MPs want the DWP to check if there were any errors in “potentially underpaying men and women who are divorced”.
