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South African banking major FirstRand Bank’s India branch has posted a net loss of Rs76.75 crore for 2013-14.
In a statement, rating agency CRISIL said given the challenging macroeconomic environment, the branch was witnessing asset quality pressure. As of March-end, its gross non-performing asset ratio was 14.7 per cent. Its overall asset base stood at Rs1,350 crore, including investments of Rs890 crore in government treasury bills, certificates of deposit and commercial papers.
According to CRISIL, the branch’s loan book was small —worth about Rs200 crore. It primarily comprised credit to companies and medium enterprises.
In February 2009, the Reserve Bank of India had given the bank a licence for operations in India. As initial capital, the branch had received Rs 409 crore from its head office. In 2013-14, the parent entity infused an additional Rs 130 crore into the India branch.
In April 2009, the branch began corporate and investment banking operations; in April 2012, it started retail and commercial businesses. Now, the bank plans to focus on and expand these operations in India.
CRISIL has reaffirmed an ‘A1+’ rating for FirstRand Bank’s certificates of deposit. The reaffirmation follows Standard & Poor’s downgrade of the long-term counterparty credit rating---from ‘BBB/Negative/A-2’ to ‘BBB/Stable/A-3’.
