Recent troubles at Credit Suisse Group could be a little more relevant from an Indian perspective than the meltdown at Silicon Valley Bank, as it is the 12th largest foreign bank in India. However, given that foreign banks hold only 6% of total banking assets, it might not be a relevant figure to impact the banking sector in any way.
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Credit Suisse has Rs 20,700 crore in total assets in India as of March 2022. As per Jefferies, Credit Suisse has only one branch in India which accounts for a 1.5% market share among all foreign banks’ total assets and represents 0.1% of assets of the overall banking sector. Seventy percent of these assets are in government bonds, which are mostly short term in tenure. The lender has zero non-performing loans.
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Of total assets, Rs 1,900 crore are in form of cash and bank balance, Rs 900 crore in cash credits, overdrafts and loans, and Rs 14,600 crore in the form of government bonds, among others. Twenty top borrowers account for 99.9% of the bank’ s total loans.
As per Jefferies data, the bank’s total borrowings in India stand at Rs 12,200 crore, forming about 73% of total liabilities. “While the share of shorter-term liabilities is high, assets are mostly in liquid G-Secs. In this context, we note that during 4Q22, the global customer deposit base of the bank contracted by 37% QoQ to CHF 233 billion (Swiss Franc) and total assets contracted by 24% QoQ to CHF 531 billion,” it noted.
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“Given the relevance of Credit Suisse to India’s banking sector, we see softer adjustments in assessment of counter-party risks, especially in the derivatives market. We expect the RBI to keep a close watch on liquidity issues, counter-party exposures and intervene as necessary. This may also lead to institutional deposits moving more towards larger/ quality banks,” Jefferies said.
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The top-five foreign banks in India are: HSBC with Rs 2.47 trillion of assets, Citibank with Rs 2.33 trillion of assets, Standard Chartered with Rs 1.75 trillion, Deutsche Bank with Rs 1.48 trillion and JP Morgan with Rs 90,900 crore in total assets as of March 2022.
