Second wave of NPAs? SBI, BoB, YES Bank could be hit, says Jefferies

YES Bank, Bank of Baroda, SBI, IndusInd Bank, and RBL Bank are amongst the banks most prune to “high risk” emanating from Anil Dhirubhai Ambani Group (ADAG), Cox & Kings, CG Power, and DHFL

Bank of Baroda (BoB), Axis Bank, ICICI Bank, and State Bank of India (SBI) could be staring at another wave of non-performing assets (NPAs), especially in the telecom and construction sector, as there appears to be a divergence between the credit rating assigned and the financial health of the corresponding corporate entity, says the latest sector report by Jefferies.

In a note on Indian banks and financial institutions co-authored by Nilanjan Karfa and Harshit Toshniwal, Jefferies suggests there is a potential “meaningful divergence” between the ratings and the debt repayment ability. YES Bank, Bank of Baroda, SBI, IndusInd Bank, and RBL Bank are amongst the banks, Jefferies says, that are most prone to “high risk” emanating from Anil Dhirubhai Ambani Group (ADAG), Cox & Kings, CG Power, DHFL and Essar Shipping.

Given the elevated debt serviceability ratio (the higher the ratio the poorer the ability to sustain debt levels), the ‘A’ rated corporate are the most prone to further credit rating downgrades. The report, however, points out that debt or interest repayment abilities of ‘BBB’ and below rated companies have seen an improvement….

DGCA orders check for cracks in 23 SpiceJet Boeing 737-NG aircrafts

Nineteen passenger aircraft above 26,000 flight cycles and four freighters having above 36,000 cycles of SpiceJet will be affected by the order

Indian aviation regulatory body, Directorate General of Civil Aviation (DGCA), has ordered checks of the joining areas of wings and body of all Boeing 737 Next-Generation (NG) aircraft in India for those which have completed over 26,000 flight cycles (FC).

Recently, cracks were found in three Boeing 737 NG planes having more than 36000 flight cycle at the wing to body frame fitting during a check. Boeing has been apprised about the cracks. Nineteen passenger aircraft above 26,000 flight cycles and four freighters having above 36,000 cycles of SpiceJet will be affected by the order. Vistara and Air India Express are currently flying nine and 25 aircraft of Boeing 737s but they will not be affected as their aircraft have yet to touch 17,000 flying cycles. A flight cycle is one complete flight from take-off to landing.

A senior DGCA official said the checks will start this week. “An airworthiness directive is expected on Wednesday that will be effective from Thursday (for the checks). The inspection will last an hour and will be done with the help of Boro equipment,” he said…