IOB net down 53% on loan restructuring

Indian Overseas Bank has reported a 53 per cent decline in net profit for the quarter ended December 31 at Rs 108.27 crore, from Rs 231.66 crore for the comparable previous year quarter. Mr M. Narendra, Chairman and Managing Director of the bank, attributed the drop primarily to restructuring of loans amounting to Rs 3,600 crore (particularly on two major accounts in the telecom tower and power sectors) and the resultant reversal of interest to the tune of Rs 75 crore during the quarter. However, he said, the bank's focus is currently on improving...

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Banking licences: Ministry, RBI step up shadow-boxing

The central bank seems to be in an unusually generous mood on new banking licences. In a sharp departure from its earlier cautious stance, the Reserve Bank of India (RBI) is now in favour of giving banking licences to all the applicants that meet the eligibility criteria mentioned in the guidelines issued for this purpose. But, the finance ministry is not in sync with RBI’s generosity on the ground that it would be difficult to regulate and supervise a large number of banks. This new round of difference of opinion would extend the long wait for...

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Higher provisioning tempers Bank of India's net profit

Higher provisioning towards bad loans and investments moderated Bank of India's net profit in the October-December 2011 period. Profits rose by a modest 10 per cent to Rs 716 crore, against Rs 653 crore in the corresponding year-ago period. While net interest income (the difference between interest earned and expended) nudged up by 4 per cent to Rs 2,067 crore (Rs 1,986 crore), non-interest income (includes commission, exchange and brokerage, profit from exchange transactions and recovery in written off accounts) rose by 19 per cent to Rs 471 crore...

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Despite good recoveries, Canara Bank net down

Higher provisioning during the quarter caused a 21 per cent dent in net profits for Canara Bank during the third quarter of this fiscal. The bank posted net profits of Rs 876 crore. “Our profit would have been higher but for two reasons. One major account was restructured, and we had to provide Rs 150 crore for impairment of fair value; and because of spike in government yields, we had to provide Rs 185 crore for depreciation on investments,” said Mr S. Raman, Chairman and Managing Director, Canara Bank. Income, expenses up Despite the bank's interest...

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Karur Vysya Bank posts 10% rise in net profit

Karur Vysya Bank has registered a 10.3 per cent increase in its net profit for the quarter ended December 2011 as compared to the corresponding quarter of the previous fiscal. The bank's net profit rose to Rs 124.92 crore (Rs 113.22 crore); net interest income increased 11.3 per cent to Rs 234.66 crore (Rs 210.69 crore) and interest income by 48.8 per cent to Rs 856.33 crore (Rs 575.49 crore). Commenting on the performance, KVB's Chief Executive, Mr K. Venkataraman, said “though this is not anything great, we have met our internal targets”. The...

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IndiaFirst launches insurance plan for vehicle-buyers

IndiaFirst Life Insurance has launched a life insurance cover for vehicle-buyers. The company, a joint venture of Bank of Baroda, Andhra Bank and the UK's Legal and General, tied up with Varun Motors in this regard. The product, called Autolife, will offer a life insurance cover up to Rs 20 lakh in four different options and a pure protection plan. “We feel this will change the way in which life insurance is sold,” Dr P. Nandagopal, Chief Executive Officer, IndiaFirst Life Insurance told newspersons here on Friday. The product was an extension...

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PNB to hire 775 management trainees/officers

Punjab National Bank is recruiting management trainees in the junior management grade (JMG) scale I/ probationary officers to fill up about 775 vacancies across the country. The bank has specified that candidates with a minimum of 60 per cent marks in their graduation and a total weighted standard score of 138 in the common written examination conducted by the Institute of Banking Personnel Selection (IBPS) are eligible to apply. The bank has said that only those candidates who rank sufficiently high in the order of merit shall be called for a...

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IRFC, HUDCO tax-free bonds to hit markets today

Tax-free bond issues of two Government-owned agencies — Indian Railway Finance Corporation (IRFC) and HUDCO — are to hit the market on Friday. The bonds have a tenor of 10 years and 15 years, and offer higher rates for retail investors. But, investor returns of HUDCO are marginally higher than IRFC. IRFC funds rolling stock acquisition of the Railways, while HUDCO provides housing finance to various agencies. IRFC The bonds of IRFC, the financing arm of Indian Railways, shall carry a coupon rate of 8 per cent per annum for 10 years and 8.1 per...

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HDFC Life opens office in Dubai

HDFC Life, a private life insurance company from India, has launched its first international operations with the opening of its representative office in Dubai. It is a joint venture between Housing Development Finance Corporation Ltd (HDFC) and Standard Life plc, the leading provider of financial services in the UK. “The launch of our operations in Dubai is the beginning of HDFC Life’s expansion into the region. The vast NRI population would be able to closely understand the benefits of HDFC Life’s wide ranging product portfolio catering to their...

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Public sector banks' ATM move 'has not hit SBI's plans'

The move to set up ATMs through a consortium of public sector banks (PSBs) in the country has not hampered the ATM-related activities of State Bank of India, according a top executive. The move follows a directive by the Government in this regard. In an informal chat with Business Line on the sidelines of a CSR (corporate social responsibility) programme of the bank here on Thursday, Mr A. Krishna Kumar, Managing Director and Group Executive (National Banking) of SBI, said that the process of putting ATMs through consortium of PSBs has not hampered...

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Vijaya Bank Q3 net down 18% despite rise in interest income

Despite a 40 per cent increase in interest income, Vijaya Bank’s net profit was down 18 per cent to Rs 124.26 crore during the third quarter of this fiscal. “This quarter, our net profits, net interest income, net interest margin and non-performing assets have taken a dent. We have taken all possible steps to tackle these issues,” said Mr H.S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank. He explained that the bank “had to provide impairment in value of some accounts, and also prudentially write off some NPAs during the quarter”,...

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LIC's health plan bags Golden Peacock award

Life Insurance Corporation of India has bagged the Golden Peacock Innovative Product/Services Award 2011 for its health insurance product, Jeevan Arogya. The award was received by Ms Renu Jain, Head of Health Insurance Segment, LIC of India, at a function held in Bangalore last week. First Probably, this was the first time that a health insurance product was chosen for the Golden Peacock Award. “Jeevan Arogya has been driving our growth in health insurance segment since its launch in June last year,” Ms Jain told Business Line here. First premium It...

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Rise in provisions drags Union Bank's Q3 profit

Union Bank of India reported a sharp 66 per cent decline in net profit to Rs 197 crore in the October-December 2011 period, against Rs 579 crore in the corresponding period last year. Increase in provisions towards non-performing assets, restructured advances and depreciation on investments weighed down the bank's profitability. During the reporting three months, gross NPAs increased by Rs 72.53 crore to Rs 5,209 crore. In the nine months period, gross NPAs increased by Rs 1,586 crore. In the reporting period, provisions towards NPAs and standard...

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Bank of Baroda Q3 profit jumps 21% on ‘other income' surge

A robust growth in other income and tight control on operating expenses helped Bank of Baroda report a 21 per cent increase in net profit at Rs 1,290 crore in the October-December 2011 period, against Rs 1,069 crore in the corresponding year ago period. In the reporting three months period, its net interest income (difference between interest earned and interest expended) increased by 16 per cent to Rs 2,656 crore (Rs 2,292 crore in the corresponding year ago period). Other income, which includes income from sale of investments and foreign exchange...

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CRR cut to help ease liquidity in the system: Karnataka Bank

The Managing Director and Chief Executive Officer of Karnataka Bank Ltd, Mr P. Jayarama Bhat, has said that the RBI’s move to reduce CRR by 50 basis points in the third quarter review of monetary policy for 2011-12 is a concrete step in easing liquidity situation in the banking system. Speaking to Business Line, Mr Bhat said that CRR cut is a concrete step in easing liquidity, and this supply of liquidity will increase the credit portfolio of banks. (The CRR cut of 50 basis point is likely to release Rs 32,000 crore of liquidity into the banking...

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CRR cut on expected lines: YES Bank official

Dr Shubhada M. Rao, President and Chief Economist of YES Bank Ltd, said that the CRR cut of 50 basis points in the third quarter review of monetary policy 2011-12 by the Reserve Bank of India is in line with expectation. Speaking to Business Line over phone, Dr Rao said: “I think our call has come right in terms of being in line with expectation. We did see structural kind of factors creeping into the liquidity deficit. We had anticipated CRR cut of 50 basis points. Quite clearly this is what has got effected.” Stating that growth, particularly...

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RBI cuts CRR by 50 bps, keeps repo rate unchanged

The RBI Governor, Dr D. Subbarao, chose to continue in ‘pause’ mode on the rate front, retaining the key repo rate at 8.5 per cent. But he decided to give markets something to cheer about by cutting the cash reserve ratio (CRR) by 50 basis points and release Rs 32,000 crore into the system. The CRR will now be at 5.5 per cent. The policy document said that these steps will ease liquidity conditions, mitigate downside risks to growth and continue to anchor medium-term inflation expectations on the basis of a credible commitment to low and stable...

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RBI wants banking services to reach remote villages

The Reserve Bank of India wants benefits of banking to reach remote villages in the country. Accordingly, in Andhra Pradesh, it has set a target to reach 6,640 uncovered villages before March 31, according to Mr A. Sambasiva Rao, Regional Director, RBI. Addressing a meeting in connection with his visit to Financial Literacy and Credit Counselling centre here, Mr Rao said that about 89 per cent of villages were covered so far. While commercial banks were in the forefront in achieving the targets, some regional rural banks and private banks needed...

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PNB waiting for IRDA nod on Metlife stake

Awaiting regulatory approval for its proposed acquisition of a 30 per cent stake in insurance company Metlife, Punjab National Bank (PNB) has said it will not disclose the rationale behind the move or the financial details until IRDA gives its nod. “We are waiting regulatory approval from the Insurance Regulatory and Development Authority (IRDA) for the deal and unless that comes through, we will not disclose the details and strategy,” said Mr K R Kamath, Chairman and Managing Director, PNB on the sidelines of the 100-year celebrations of the bank’s...

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SBH ties up with Tirumala Milk Products for dairy loans

State Bank of Hyderabad has entered into a memorandum of understanding with Tirumala Milk Products to provide loans to farmers for dairy activity. According to the agreement, SBH would give loans to farmers who are identified by Tirumala Milk Products Ltd to undertake dairy activity. “This will help increase income levels of farmers and also create employment,” Mr M. Bhagavantha Rao, Managing Director, State Bank of Hyderabad, told newspersons after signing the MoU here on Monday. For the third consecutive year, SBH had completed the required priority...

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Indian Bank wins innovation award

Indian Bank has won the ‘Golden Peacock Innovative Products/Service Award' for 2011. The award was received by the bank's Chairman and Managing Director, Mr T. M. Bhasin, at the World Congress on Total Quality, held in Bengaluru on Saturday. The award was given to the bank “in recognition of its contribution to promotion of self help groups (SHGs)”. SHGs have turned out to be major vehicles of women empowerment. In the current year, Indian Bank has so far disbursed Rs 1,360 crore to 55,391 SHGs, taking the total exposure under the SHG portfolio...

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Federal Bank net jumps 41%; NRI deposits up

The net profit of Federal Bank spurted by 41 per cent to Rs 202 crore for the quarter ending December 31. The bank delivered substantial topline and bottomline growth despite a challenging macro environment, both in the domestic and global market, a press release issued here said. The bank, which had been working on its transformation to a truly pan-India status while adopting contemporary management techniques, has reported excellent numbers which not only reflect rapid growth but also asset quality. The total business grew by 22.7 per cent to...

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Kotak Mahindra Bank net up 47% on loan book growth

Strong growth in advances and other income, and lower provisions helped Kotak Mahindra Bank’s profits rise by 47 per cent to Rs 276 crore, in the quarter ended December 31, 2011, from Rs 188 crore in the corresponding quarter last year. The growth in advances has come mainly from segments like corporate, commercial vehicles, construction equipment and mortgages. “There is no slowdown in the segments that we are present in. We have a large share of retail loans and short term working capital loans in the corporate segment. The slowdown is in longer...

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Govt to conduct interviews for 22 ED postions

The Government is expected to conduct interviews later this month to fill 22 executive director positions in public sector banks. The vacancies are coming up over the next one year due to superannuation as well as creation of new ED positions in the banks. Large public sector banks are expected to have three EDs while smaller banks two from April 2012. Currently, large public sector banks have two EDs while smaller banks have one. As against 22 vacancies, about 40 candidates are eligible to appear for the interview to be conducted by the Finance...

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Bye-bye cheques, hello electronic payments

Electronic transactions are making rapid strides, with more and more of us abandoning cheques and cash in favour of Internet banking and cards. Reserve Bank of India data for retail electronic payments show that in 2010-11, the total value of electronic transactions almost doubled that of the previous year. Again, between April and November 2011 the value transacted was 72 per cent more than in the same period the year before. Electronic payments involve money transfers into other accounts as well as direct debits for payment of utility bills,...

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ICICI Lombard aims at Rs 5,000 cr premium collection

ICICI Lombard expects to cross the Rs 5,000-crore mark in premium collection this fiscal on the back of good growth in health and motor insurance segments, a top executive of the leading private general insurer said. “We are hopeful of crossing Rs 5,000 crore in gross written premium collection (GWP) in the current fiscal and expect to clock a 20-25 per cent growth in overall business for the next three to four years,” Executive Director of ICICI Lombard, Mr Neelesh Garg said. The company had a GWP of Rs 4,252 crore during the last financial year. Mr...

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