Indian banks raise $4b in bonds on strong global demand

Key transactions include a $1b issuance by ICICI bank, according to Citi.

Banks in India have raised $4b by issuing bonds, a move indicating strong demand and investor confidence in the financial institutions, said Citi.

The bonds were priced tighter than initial price guidance, underlining global confidence and demand for access to credit investments from India’s financial sector, the bank said.

Amongst Citi’s key transactions include a total of $700m in bonds issued by the Bank of Baroda; a $500m bond transaction with the State Bank of India; and a $1b bond issuance by ICICI Bank.

A separate report by S&P noted that private banks in India are leaning on retail loans in order to reverse the negative impact of their shrinking net interest margins (NIMs).

“The lenders have indicated that they want to increase their share of high-yielding, predominantly retail, loans and capitalize on the central bank's incentives on foreign currency deposits to reverse the downward trajectory of their NIMs,” S&P Global Market Intelligence said in a 20 July report.