Expect $30-35 bln equity dilution from Basel III - Macquarie
Reuters Market Eye - The RBI directives to meet Basel III regulations could lead to an equity dilution in banks of roughly $30-35 billion over the next five years, Macquarie says.
"Frequent dilutions will be required to support growth and also simultaneously maintain the CAR levels and capital buffers," Macquarie says.
Public banks would be especially impacted. Pension liability provisions will pull down the common equity ratio by around 50 basis points for these banks, Macquarie predicts.
View contrasts with Goldman, which on Thursday said it did not expect a significant impact from Basel III requirements on Indian banks.
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The BSE Sensex ended up slightly on Monday after rising to a record high for a third consecutive session as strong foreign buying continued to boost domestic-focused shares such as those of HDFC Bank, but momentum waned as exporters slumped on a stronger currency. Full Article