Ambit Capital red flags banks’ books
“We urge investors not only to be vigilant about Indian banks’ dodgy financial statements but also to step up the pressure on these banks to get their act together,” said the report prepared by Saurabh Mukherjea of Ambit Capital.
“We reiterate that investors should shun large Indian banks where asset quality looks highly suspect and where profits and networth are obviously heavily overstated,” the report added.
The report says that financial statements of both public and private sector banks are no longer worth the paper they are written on and has also raised concern over the aggression practised by the CEOs of the banks.
The report however approves the financial statements of three large banks —ICICI Bank, Bank of Baroda and Kotak Mahindra Bank.
The firm has raised its concern over rise in restructured portfolio of banks and said that the proportion of restructured advances soared over the last four years to 3 per cent of loans outstanding as of March 2012, and has continued rising further during first half of FY’13.
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