The fate of European lender Credit Suisse Group AG is more important than the collapse of the Indian banking sector Silicon Valley BankAccording to Jefferies India.
“Given the relevance of Credit Suisse to India’s banking sector, we see a softer adjustment in counter-party risk assessments, particularly in the derivatives market,” analyst Prakhar Sharma wrote in a note.
As the bank “has a major presence in India’s derivatives market,” Sharma is watching for any liquidity issues or counter-party risks that may arise from the fallout. Of note, foreign banks account for 4% to 6% of assets in India, but a whopping 50% of off-balance sheet liabilities.
According to Jefferies, Credit Suisse has over 200 billion rupees ($2.4 billion) in assets in India, making it the 12th largest offshore lender. The South Asian nation has debt for 73% of its total liabilities, most of which are of short duration.
Sharma expects the country’s central bank to watch for liquidity issues and counterparty risk and intervene as required. He sees institutional deposits moving towards large and quality banks in India.
That said, foreign banks make up only 6% of banking assets, with the Swiss lender accounting for 1.5% of that share, and Jefferies estimates a “softening effect on banking in India”.
Credit Suisse announced it is offering to buy back up to 3 billion francs ($3.23 billion) of debt securities, which could help restore market confidence. chief executive officer ulrich körner Has said that the financial position of the bank is good.
“Given the relevance of Credit Suisse to India’s banking sector, we see a softer adjustment in counter-party risk assessments, particularly in the derivatives market,” analyst Prakhar Sharma wrote in a note.
As the bank “has a major presence in India’s derivatives market,” Sharma is watching for any liquidity issues or counter-party risks that may arise from the fallout. Of note, foreign banks account for 4% to 6% of assets in India, but a whopping 50% of off-balance sheet liabilities.
According to Jefferies, Credit Suisse has over 200 billion rupees ($2.4 billion) in assets in India, making it the 12th largest offshore lender. The South Asian nation has debt for 73% of its total liabilities, most of which are of short duration.
Sharma expects the country’s central bank to watch for liquidity issues and counterparty risk and intervene as required. He sees institutional deposits moving towards large and quality banks in India.
That said, foreign banks make up only 6% of banking assets, with the Swiss lender accounting for 1.5% of that share, and Jefferies estimates a “softening effect on banking in India”.
Credit Suisse announced it is offering to buy back up to 3 billion francs ($3.23 billion) of debt securities, which could help restore market confidence. chief executive officer ulrich körner Has said that the financial position of the bank is good.
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