ICRA estimates MTM loss of Rs 155 billion for banks

Rating agency ICRA estimated that the year end surge in bond yields would cost the banking sector nominal losses of about Rs 155 billion.

Banks need to value their trading portfolio in sync with the market rate, as such any fall in price have to be factored in the books. In the third quarter ended in December, the 10-year bond yields rose 67 basis points, as the government announced an extra borrowing programme.

The 10-year yields closed at 7.33 per cent at the end of the December quarter.

“With reduced cushion to absorb interest rate movements, the recent surge in