For all those who have been reading about how badly the mutual fund industry, life insurance industry and the banking industry are suffering….please look at the results of all the banks!

– Icici bank was more profitable because of the Rs. 350 crores from the life insurance arm

– Hdfc mutual fund is the biggest mutual fund, but Reliance is the most profitable in the country

– Banks are fighting with each other to increase interest rates on the savings bank account – Kotak Bank and Yes Bank are willing to pay 6% p.a. vs 4% by SBI…- showing the kind of margins that are still available in the banking industry.

-Sundaram Finance and Cholamandalam Finance haveĀ  both reported a nice jump in their eps by a nice percentage…

I stick to my view – as in the title – BANKING IS VERY VERY PROFITABLE….and in the US it is even better. They get fixed deposits (guaranteed by the government) with which they write derivative contracts – when they fail the government bails them out….LOL

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  1. LOL, yes!

    As much as Subra is against regulators, RBI has done a decent job. Whenever any major Bank has err-ed, RBI has been rather swift in action. Case in question: GTB. Such actions send correct signals across.

    If I can say, it is this kind of action which was not taken by US Regulator’s which led to what happened. Remember that GTB did not go bankrupt – but was forced to merge (before it went down) with a bigger Bank, when things got a bit rosy there.

  2. Subra, another point.

    Banks have been there for 100’s of years. Their accumulated strength and years of understanding of the Indian Banking market have helped in them being profitable in India. (Even the new Age Banks have people from the old age Banks).

    Not so with Insurance & AMCs. LIC (with similar years of standing) remains highly profitable. I think the major Life Insurance companies, post-10 years, may get profitable. The General Insurance Companies were highly regulated in product prices – still they are profitable too, overall. The same argument may be extended to AMCs also? Tks for reading.

  3. RBI has done a decent job? Well you have no clue on what they have missed out. We are terribly under banked. A poor Indian living in urban India has NO BANK CATERING TO HIM – if there are state owned banks should they not be doing that job? Forget getting a loan – they cannot even open an account.

    RBI has done a good job in the controlling yes, but zilch in the development of banking. Saying this inspite of the fact that the promoted Idbi, nse, etc….Could have done much much better. If they had given 30 MORE LICENCES…Also did you see a woman committing suicide because she lost 8L in Memon Cooperative bank? who is responsible? the regulator? I can spew venom on regulator mistakes – sorry regulator blunders.

    The Harshad, Ketan, Hometrade scams WERE ALL SIMILAR and all happened because of RBI….LOL and more will happen!

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