The margin-versus-income distinction is useful. The 2029–31 maturity window seems like the harder test: has RBI published a split between three- and five-year FCNR deposits, or will that only become clear through bank disclosures?
The timing point is the one I keep coming back to. Most of this money only sat on the books for about a month of the September quarter, so the margin hit we have seen so far is probably not the full story. If ICICI and Kotak are right about a weaker December quarter first, then judging these banks on this quarter alone would be misleading. The better test, as you lay out, is return on assets over the next few quarters, not the headline margin. A thin loan on a much bigger book can still add up, but only if the cheap rupees keep earning well above their cost once the December quarter is fully loaded.
The margin-versus-income distinction is useful. The 2029–31 maturity window seems like the harder test: has RBI published a split between three- and five-year FCNR deposits, or will that only become clear through bank disclosures?
RBI did not give any breakup, we can find detailed breakup in bank disclosures though (not all banks would share)
The timing point is the one I keep coming back to. Most of this money only sat on the books for about a month of the September quarter, so the margin hit we have seen so far is probably not the full story. If ICICI and Kotak are right about a weaker December quarter first, then judging these banks on this quarter alone would be misleading. The better test, as you lay out, is return on assets over the next few quarters, not the headline margin. A thin loan on a much bigger book can still add up, but only if the cheap rupees keep earning well above their cost once the December quarter is fully loaded.
the largest state bank also books its fcnr leverage loans overseas but made room by cutting trade finance there
flagged supply chain margins as equal or thinner than the fcnr loans
told investors in august it expected no nim hit, results due nov 3
Looking forward to hearing from them as well on this.
hoping nov 3 results show whether the trade finance swap kept nim flat