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Indian Banks Are Well-Placed To Handle SVB-Like Stress, Says Jefferies
Indian banks appear well-placed to handle stresses that took down Silicon Valley Bank, the sixteenth largest lender in the U.S., according to an analysis by Jefferies. The bank's deposits fell from $198 billion in March 2022 to $165 billion in February 2023. Silicon Valley Bank "focused on a narrow tech corridor that not only increased concentration risk, but also flooded a small bank with deposits as the tech industry flourished during Covid that it was ill-equipped to handle," analysts at Macquarie wrote in a Monday report. Its bond investments took a beating as interest rates started to rise. SVB held HTM securities with a fair value of $76.1 billion in December 2022, carrying unrealised losses of $15 billion. Unlike SVB, Indian banks don't hold a majority of their assets in the form of bonds. Source - NDTV
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