SEBI to ease registration norms for foreign investors

Capital markets regulator will soon ease registration norms for foreign investors, Securities and Exchange Board of India chief UK Sinha told reporters on Friday.

The government is looking to ease norms for the entry of foreign investors as part of efforts to attract more capital inflows to bridge its widening current account deficit.


Source: Economictimes

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Now, pay your auto fare via mobile

Old private sector lender Federal Bank has turned to auto drivers to increase its mobile payment services through IMPS (Interbank Mobile Payment Service).

The facility will enable auto drivers to receive their fare from the customers of any bank using a mobile phone.

“This is a cashless mobile-based payment system which accommodates any amount starting from Re 1 and adds convenience and security to both passengers and drivers eliminating coin shortage and fake currency problems, said D. Sampath, Head - Retail Banking, Federal Bank.

A passenger can make payments by sending an SMS from his mobile phone to his bank.

The simple instructions to follow are displayed inside the auto rickshaw.

The bank of the passenger will then process the transfer request with the technical support of National Payment Corporation of India (NPCI) and send the SMS confirmation to both the passenger and the driver within seconds, Sampath explained.

Viability

Considering payments to auto drivers is currently cash-based and not much of an inconvenience to customers, the viability of the facility remains to be seen. Sampath said, “Though these are small amount payments, the auto drivers have expressed interest in this product. We are providing training to all drivers on the usage of the service.”

Though auto drivers in Kochi are aware of the mobile payments facility, they still prefer ready cash for their.

About 150 auto drivers have registered with the bank to become beneficiaries of IMPS.

At present, this facility has been piloted in Kochi, Irikkur in Kannur district and Chandigarh. The bank will also extend these services to chemists, general stores and churches.

Satheesan, an auto driver plying in the Kochi city limits, said he had to visit the bank branch at the day’s end to collect his fare, which is time consuming, as he does not use an ATM card.

Cash matters

“I don’t know how I would benefit as it is expensive to reach the branch premises to collect cash when I can avoid that with cash transactions,” he said.

Auto drivers said that it would be easy to meet their daily expenses like their meals or fuelling their vehicle with ready cash in the pockets.

However, Sampath stated that accepting a new technology will always be greeted with scepticism.

Beena.parmar@thehindu.co.in

sajeevkumar.v@thehindu.co.in


Source: thehindubusinessline

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Sanjiv Misra takes over non-executive Chairman of Axis Bank

Sanjiv Misra, former Secretary, Department of Expenditure, Ministry of Finance, today took over as the Non-Executive Chairman of AXIS Bank Ltd.

This follows RBI approval of his appointment effective today (March 8).

In a communication to the stock exchanges, the bank said on the expiry of his term as Chairman on March 7, Adarsh Kishore has resigned with effect from March 8 and has ceased to be a Director of the bank.


Source: thehindubusinessline

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HDFC Bank to open more branches in Karnataka

HDFC Bank plans to open 50 new branches in Karnataka by the end of next fiscal.

The proposed expansion includes the districts of Chamarajnagar and Kolar, where the bank does not have any branches, HDFC Bank Branch Banking Head (South) Dhiraj Relli told reporters here today.

“By March 31, 2014, we plan to have 200 branches in Karnataka (from the current 150),” he said, adding that the bank sees huge potential in rural and semi-urban areas’’.

The country’s second largest private sector bank opened its 150th branch in Karnataka’s Dakshina Kannada district’s town of Sullia today.

At present, the bank has 1,069 ATMs across Karnataka, including 874 here.


Source: thehindubusinessline

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IDBI Bank to hire 2,000 people next fiscal

IDBI Bank plans to open about 150 branches and add about 2,000 employees in fiscal 2013-14.

Of the 2,000 recruits, 500 would be for replacement and attrition while 1,500 would be for staffing its new branches.

“We have an advantage of being a young organisation with very few about to retire,” said R. K. Bansal, Executive Director, IDBI Bank.

The average age of IDBI Bank’s employees is 30 years, which, he said, was lower than its peer set.

An attrition rate of 5-6 per cent for a PSU bank such as IDBI is definitely on the higher side, he said, but pointed out that a significant number of its employees were on contract.

With a predominant presence in urban areas, the bank now looks to open more branches in rural and semi-urban areas to facilitate financial inclusion and priority sector lending.

As of end-December, 63 per cent (645 of its 1,019 branches) was in the urban areas. As of March 31, 2012, the bank’s total staff strength was 15,435.

ADVANCES

IDBI Bank sees advances growing at 15 per cent and deposits at 13 per cent in the next fiscal, said Bansal.

The bank logged Rs 1.86-lakh crore in deposits and Rs 1.71-lakh crore in advances with a balance-sheet size of Rs 2.73-lakh crore as of December 31, 2012.

“We are in the process of realigning our business mix of wholesale versus retail loans (agriculture/personal and SME) from 67:33 to 60:40,” said Bansal.

The bank is on course to end FY13 with a CASA (ratio of current account savings account to total deposits) at about 26 per cent. Last December, its CASA was at 22 per cent.

BANK LICENCE

On new entrants after the recent bank licensing norms put out by the RBI, Bansal said it would take them close to two years to receive approvals and begin operations.

Here, he felt existing private sector banks would see more attrition than public sector banks.

BASEL III

Most Indian banks would more than meet the Basel-III norms. It is just a matter of substituting their Tier-1 debt by equity. The banking sector’s return on equity (ROE) will dip from the existing levels of 14-18 per cent. However, an ROE of 12 per cent for a Basel-III compliant bank is good enough, he felt.

NON-PERFORMING ASSETS

NPA levels in the industry have bottomed out given the fact that there are no big cases in corporate debt restructuring.

Recovery however will take time, he said, as there are policy changes in most sectors. This would reflect only after the second quarter of FY14 as there were chances of delayed projects being revived.

Pick up of infra projects is taking time and export-related sectors such as gem and jewellery are under pressure, he concedes.

Bansal sees credit pick up in power, roads, telecom, steel, cement and textiles, especially from the private sector in the coming quarters.

IDBI Bank’s net NPA was Rs 3,302 crore (1.93 per cent) last December on higher provisioning.

raghavendrarao.k@thehindu.co.in


Source: thehindubusinessline

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HDFC Bank to open more branches in Karnataka

HDFC Bank plans to open 50 new branches in Karnataka by the end of next fiscal.

The proposed expansion includes the districts of Chamarajnagar and Kolar, where the bank does not have any branches, HDFC Bank Branch Banking Head (South) Dhiraj Relli told reporters here today.

“By March 31, 2014, we plan to have 200 branches in Karnataka (from the current 150),” he said, adding that the bank sees huge potential in rural and semi-urban areas’’.

The country’s second largest private sector bank opened its 150th branch in Karnataka’s Dakshina Kannada district’s town of Sullia today.

At present, the bank has 1,069 ATMs across Karnataka, including 874 here.


Source: thehindubusinessline

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StanChart, ADB partner to support MFIs across Asia

UK-headquartered, Standard Chartered Bank will originate and service $150 million microfinance institutional loans across Asia in collaboration with the Asian Development Bank (ADB).

Under this regional programme, ADB will share the risk via risk participation and guarantee programme on this portfolio for up to $75 million. It will also enable Standard Chartered Bank to extend additional credit to microfinance institutions, the bank said in a statement.

Peter Heidinger, Global Head, Financial Institutions Group, Standard Chartered, said, “This partnership with ADB will unlock more funding for microfinance and extend support to the sector when it is re-emerging from a difficult economic cycle. We expect this programme to benefit approximately 30 microfinance institutions in Asia.”

beena.parmar@thehindu.co.in


Source: thehindubusinessline

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UBI, SIDBI team up to offer easy credit to small-scale units

Kolkata-headquartered United Bank of India (UBI) on Thursday said that it has entered into a memorandum of understanding (MoU) with Small Industries Development Bank of India (SIDBI) for providing easier credit to micro, small and medium enterprises (MSMEs).

The MoU was signed on March 5 (Tuesday). Loans would be provided to the MSMEs under the programme for facilitating enterprise loans.

According to a UBI release, SIDBI would act as a facilitator of the small and medium enterprises by sponsoring investment proposals on behalf of UBI. The latter would look at the credit linkage part.

abhishek.l@thehindu.co.in


Source: thehindubusinessline

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YES Bank rolls out ‘Incredible India’ travel card

YES Bank has launched an ‘Incredible India Travel Card’ in association with the Tourism Ministry. This pre-paid card travel card was unveiled by K. Chiranjeevi, Minister of State for Tourism, at the ITB Fair in Berlin, Germany.

Rana Kapoor, Founder, Managing Director & CEO of YES Bank, said this co-branded card would make travelling within India a cashless and hassle-free experience.

“The ‘Incredible India’ campaign has a huge global recall, and we believe that the private sector too must supplement the Ministry’s marketing efforts with robust product offerings to deliver a smooth and flawless tourist experience”, Kapoor said.

YES Bank is the only bank to tie up with the Tourism Ministry to help promote the ‘Incredible India’ initiative.

Denominated in Indian rupees, the pre-paid card can be preloaded with a value of up to Rs 50,000 at any point of time, subject to basic ‘know your client’ procedures.

The card, expected to be especially useful for visitors to India, will be distributed through YES Bank’s exclusive branch network, full-fledged money changers and Government-recognised third party vendors, such as travel agents, hotels, and airport kiosks.

The card can also be used at any point of sale terminals and to withdraw cash from ATMs across the country.

Srivats.kr@thehindu.co.in


Source: thehindubusinessline

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HSBC sells US loans for $3.2 b

Global banking giant HSBC announced on Tuesday that it has agreed to offload a package of home loans for $3.2 billion in cash to US-based SpringCastle Acquisition, one day after the bank posted falling annual profits.

The Asia-focused lender said in a statement that its HSBC Finance Corporation subsidiary has entered into a deal to sell its personal unsecured loan and personal homeowner loan portfolios to SpringCastle Acquisition LLC, a division of Delaware—based Springleaf Finance, Inc. and Newcastle Investment Corp.

HSBC added that the transaction should be completed in the second quarter of this year.

The announcement came one day after the bank revealed that net profits sank 16.5 per cent in 2012, due to US money-laundering fines, mis-selling scandals, rising taxation and a huge accounting charge.

Profit after tax fell to $14.03 billion last year, which compared with $16.8 billion in 2011. Pre-tax earnings meanwhile slid 6 per cent to $20.65 billion and revenues dipped one per cent to $82.55 billion.

HSBC’s performance was hit by a $1.9-billion fine to settle US allegations of money laundering that were said to have helped Mexican drug cartels, terrorists and Iran.


Source: thehindubusinessline

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Govt infuses Rs 1,248 cr in PNB; BoI gets Rs 809 cr

Two state owned lender Punjab National Bank (PNB) and Bank of India (BoI) today said they have received capital infusion of over Rs 2,050 crore, following the allotment of preferential shares to the government.

The bank has received allotment money of Rs 1,247.99 crore from the Government of India on March 4, 2013, PNB said in a filing on the BSE.

It allotted 1.42 crore equity shares of the face value of Rs 10 each at a premium of Rs 863.05 on preferential basis to the government.

BoI, on the other hand, received Rs 808.99 crore from the government following allotment of 2.21 crore shares at a price of Rs 365.70 per unit on preferential basis.

Meanwhile, shareholders of the UCO Bank have approved the capital infusion of Rs 681 crore by the government on March 4, 2013.

The exercise is part of the Rs 12,517 crore capital infusion plan announced by the government in January.

Last year, PNB got capital infusion of Rs 1,285 crore.

The government infused about Rs 20,117 crore in public sector banks during 2010-11, and Rs 12,000 crore in 2011-12.


Source: thehindubusinessline

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ICICI Bank to sell 25-kg pledged gold to recover loans

The country’s largest private sector lender ICICI Bank will auction this month gold jewellery weighing nearly 25 kg, which has been pledged with it for loans and the concerned borrowers have defaulted on their payments.

The auction would be conducted across various branches of ICICI Bank across Uttar Pradesh on March 16 for gold jewellery deposited by about 100 customers as collateral for their loans, ICICI Bank said in various public notices today.

While neither the exact value of the gold ornaments being auctioned nor the outstanding loans could be ascertained, an equivalent amount of gold would be worth over Rs 7 crore at the current price.

It is a usual practise to take gold loans by pledging jewellery with banks, but such ornaments can be auctioned by banks after giving sufficient notice to the borrower in case of payment defaults.

“Since the borrowers have failed to repay their dues under the facility, we are constrained to conduct an auction of the pledged gold ornaments on March 16, 2013,” the bank said in a public notice.

It further said: “In the event any surplus amount is realised from this auction, the same will be refunded to the concerned borrower and if there is any deficit post the auction, the balance amount shall be recovered from the borrower through appropriate legal proceedings.”

The private sector lender said auction would take place at ICICI Bank branches in areas including Varanasi, Lucknow, Meerut, Kanpur, Gorakhpur and Delpanderva.

Interested parties are required to submit refundable security deposits of Rs 20,000 at ICICI Bank for participating in the auction process.

In case the winning bidder refuses to accept the jewellery after the auction, then the security money would be forfeited.


Source: thehindubusinessline

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Corporation Bank pushing retail loans

To make up for the slowing corporate credit offtake, Corporation Bank has sharpened its focus on its retail loan portfolio and announced special schemes to boost auto loans.

S. Pattabiraman, General Manager, Chennai Circle, said the bank has built a retail loan portfolio of Rs 3,400 crore from across the country during the five-month period September 1, 2012, to January 31, 2013. Of this, home loans accounted for Rs 1,800 crore and car loans, Rs 900 crore. “We see big room for growth in these areas.” The bank is looking to disburse at least Rs 800 crore during its 15-day bumper car carnival. The special offer comes at an interest rate of 10.4 per cent and with ‘no processing fee’.

According to Pattabiraman, the bank will sanction a loan within two working days.

ravikumar.r@thehindu.co.in


Source: thehindubusinessline

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SBI buying property for housing staff in Singapore: Report

The State Bank of India (SBI) is investing in accommodation-based property in Singapore, ensuring higher grade housing requirements of its expatriate staff, a media report said today.

The apartment purchases should help reduce rental costs by 20 to 25 per cent within the next three years, SBI Singapore Chief Executive and Country Head Anil Kishora was quoted as saying in a report by local daily ‘The Straits Times’.

“It will stabilise our cost base. In some sense, it would insulate us from any future increases in pricing, as we won’t be paying any rentals,” Kishora said, adding that buying property also helps to boost productivity.

According to the report, SBI would want to purchase at least 10 to 20 more units to house staff as it ramps up its local presence.

SBI had recently advertised for purchasing high grade apartments, ranging from 1,100 to 1,400 sq ft in size, near to main schools and rail-based transit system.

It provides housing accommodations to its expatriate staff, 41 of whom are non-resident Indians out of the 241 people employed here.

The SBI expansionary move was in stark contrast to other foreign banks, many of which were cutting jobs and curbing incentives like housing allowances for expatriates as they rebuild balance sheets following the global financial crisis, the report said.

SBI was also enjoying strong support from the growing numbers of Indian companies setting up offices in Singapore.

“Traditionally, Indian companies would operate out of other centres, such as the UK, the US and to some extent Hong Kong, but now most of them prefer to do business out of Singapore,” he was quoted as saying.

SBI has a qualified full banking licence, which allows it to operate out of 25 business locations. It has seven branches and 21 ATMs, mainly catering to non-resident Indians and Indian tourists.


Source: thehindubusinessline

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ICICI Bank’s UK arm repatriates $100 m of capital

ICICI Bank has received capital repatriation aggregating $100 million from its wholly-owned banking subsidiary in the UK, ICICI Bank UK PLC.

The repatriated amount comprises redemption of $50 million of preference share capital and return of $50 million of equity capital, after receiving requisite approvals, the bank said in a statement.

ICICI Bank UK had a capital adequacy ratio (CAR) of 31.5 per cent at December 31, 2012. Post the repatriation, the capital base of the UK arm is $ 495 million and its capital adequacy ratio continues to be strong, the bank said.

CAR is a measure of the financial strength of a bank. It is expressed as a ratio of a bank’s capital to its assets.

The return of capital would further improve ICICI Bank's capital adequacy ratio and enhance its ability to optimise capital deployment and return on equity, the statement said.

As at December-end 2012, India’s largest private sector bank had a capital adequacy ratio of 19.53 per cent. The $100 million capital infusion will marginally improve this ratio.

Following the capital infusion and expected dilution of stake in its insurance subsidiaries (once the FDI is upped to 49 per cent), the bank may not need to tap the capital market for resources for the next four to five years, say analysts.



Source: thehindubusinessline

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Karnataka Bank, Ashok Leyland enter into pact

Karnataka Bank Ltd has signed a memorandum of understanding with Ashok Leyland Ltd for financing of commercial vehicles.

A press release by the bank said here on Monday that the bank will provide finance on easy terms to the eligible persons availing finance under this MoU. The bank has over 527 branches and Ashok Leyland has over 400 dealer outlets across India, it said.

N. Upendra Prabhu, General Manager of Karnataka Bank, and Srinivasan Anand, Head-Sales Financing, Ashok Leyland Ltd, have signed the MoU in Mangalore recently, the release added.

vinayak.aj@thehindu.co.in


Source: thehindubusinessline

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HSBC bank reports drop in annual net profit by 16.5%

Asia-focused bank HSBC said today that net profits sank 16.5 per cent to $14.03 billion in 2012, hit by US money-laundering fines, mis-selling scandals, rising taxation and a huge accounting charge.

Profit after tax fell to the equivalent of 10.78 billion euros last year, compared with $16.8 billion in 2011, London-headquartered HSBC said in a results statement. Pre-tax profits meanwhile slid six per cent to $20.65 billion.

HSBC’s performance was hit by a $1.9 billion fine to settle US allegations of money laundering that were said to have helped Mexican drug cartels, terrorists and Iran.

The bank had admitted in December to having “inadequate” controls in place and accepted responsibility for the group’s past mistakes, as part of an agreement with several US authorities including the US Department of Justice.

HSBC’s annual results were also dented by a vast $5.2 billion charge against the value of its own debt. And it set aside another $1.4 billion to cover compensation in Britain for mis-selling scandals.

However, the lender’s capital position improved following a string of asset sales, including its stake in Chinese insurance giant Ping An. As a result, the bank pledged to pay out more in shareholder dividends this year.

And bad debts – or consumer loans that have turned sour – fell to $8.31 billion from $12.13 billion last time around.

Underlying profits, stripping out exceptional items, climbed by 18 per cent to $16.4 billion, with strong growth in Hong Kong and Asia and a sharp turnaround in Europe.

“HSBC made significant progress in 2012. First and foremost, we grew our business. We increased revenues, performed well in most faster-growing markets and enjoyed a record year in commercial banking,” said chief executive Stuart Gulliver.

“We’ve made the business easier to manage and control by disposing of non-core businesses and surpassed our sustainable savings target.

“We also agreed a settlement with the US and UK authorities in respect of our past anti-money laundering and sanctions failings,” Gulliver said.

HSBC also revealed that its cost-cutting programme had exceeded the group’s target.

Two years ago, in 2011, the bank announced a large restructuring programme, including plans to save up to $3.5 billion by 2013 and to axe 30,000 jobs globally.

However, it added today that it generated extra savings of $2.0 billion, giving an annualised total of $3.6 billion.

Gulliver will meanwhile receive a deferred annual bonus of just under £2.0 million ($3.0 million, 2.3 million euros) as part of a total package worth £7.4 million. That compared with an overall figure of £8.0 million in 2011.


Source: thehindubusinessline

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LIC invites applications to fill up 750 vacancies

Life Insurance Corporation of India (LIC) has invited online applications for filling up 750 vacancies for the post of Assistant Administrative Officer (AAO).

Candidates recruited will be able to work in different streams such as Marketing, Finance, Investment, IT, Customer Relations, Underwriting, Actuarial, HR and Legal. The total emoluments for the post will be Rs 33,418 per month in an ‘A’ class city. There will be a one-year probation period, extendable to two.

Online registration is open from March 5 till April 1. The online exam will tentatively be held on May 11/12. Candidates can look up the LIC Web site for further details.


Source: thehindubusinessline

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At least 8% growth needed to tackle poverty: RBI’s Chakrabarty

India should grow by at least 8 per cent year-on-year to make some meaningful dent on poverty, RBI Deputy Governor K.C. Chakrabarty has said.

Unless the country grows by at least 8 per cent, it will not survive, Chakrabarty told Business Line on the sidelines of India-OECD-World Bank regional conference on financial education here today.

He was responding to a query on whether 5-6 per cent GDP growth will be a new normal for India.

The Central Statistics Office (CSO) had recently pegged the advance estimate for GDP growth for 2012-13 at 5 per cent, lower than the 5.5 per cent estimate put out by the Reserve Bank of India.

Chakrabarty has in a way echoed the views of RBI Governor D. Subbarao, who on Sunday said that a growth rate of 5-6 per cent is not sufficient for the Indian economy. Subbarao had said that India has the potential to grow at double-digit growth rate provided some issues are addressed.

srivats.kr@thehindu.co.in


Source: thehindubusinessline

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SBI sees profit at Rs 14,000-15,000 cr this fiscal

State Bank of India today said it expects to clock a net profit of Rs 14,000-15,000 crore in the current fiscal, backed by strong internal generation and robust demand for loans.

“For SBI we got an allocation of 3,000 crore this year (capital infusion by the government) and we expect to make a net profit of another Rs 14,000-15,000 crore of net profit this year,” State Bank of India (SBI) Chairman Pratip Chaudhuri told a television channel.

SBI had reported a marginal 4.08 per cent increase in net profit at Rs 3,396 crore for the third quarter ended December 31, 2012, mainly on account of higher provisioning for bad loans.

The public sector lender had announced earlier it will get Rs 3,004 crore as part of the government’s capital infusion plan for the current fiscal.

The government approved infusion of Rs 12,517 crore in around 10 state-owned banks by March.

When asked about loan growth, Chaudhuri said, “It has been a huge, huge pleasant surprise. I was myself slightly diffident and pegging it at 16 per cent. But as of now the year-on-year growth we are finding it close to 18 per cent.

“And I would not be surprised if the year-on-year growth could be as high as 20 or even 21 per cent.”

Elaborating on the reasons behind rise in loan demand, he said “There has been a huge upsurge in loan demand after rationalisation of our interest rates. So as we have made them more market-friendly, lowered the interest rates, we are seeing a huge demand for loans not only in the retail segment but also for corporates. Home and even for auto in our case.”

SBI cut lending rate by 0.05 per cent on January 30, a day after the Reserve Bank cut its key policy rates.

After this marginal reduction, SBI’s base rate or the minimum rate of lending has come down to 9.70 per cent from 9.75 per cent effective February 4.


Source: thehindubusinessline

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CIBIL chief visits Karnataka Bank

M. V. Nair, Chairman of Credit Information Bureau India Ltd (CIBIL), visited the head office of Karnataka Bank in Mangalore on Saturday.

Addressing executives of the bank, he highlighted the importance of using data available through CIBIL.

He said that the data will help in identifying customers with good banking track record. He suggested that borrowers with high score need be given preferential rate of interest.

A press release by the bank said here that Nair appreciated the higher quality and correct data made available by Karnataka Bank to CIBIL.

P. Jayarama Bhat, Managing Director of the bank, was present on the occasion.


Source: thehindubusinessline

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HDFC Bank raises $500 m in overseas bond sale at 3% coupon

HDFC Bank, the second largest private sector lender whose shares command the highest premium in the market across the world, has successfully sold a $500-million five-year bond at 3 per cent coupon, its lowest yet.

The $500-million unsecured senior bond issue, which saw 10-times demand or $5 billion, over the issue size, is part of HDFC Bank’s $1-billion overseas bond sale (medium term note). The money was raised through its Bahrain branch over the last weekend, StanChart, one of the merchant bankers to the issue told PTI.

At 3 per cent coupon makes it the lowest for the bank ever and also the cheapest this fiscal, StanChart said.

“HDFC Bank achieved the lowest ever coupon/YTM (yield-to-maturity) achieved for any domestic issuer and the tightest bank issuance spread in recent months, for a five-and-a-half-year issuance,” Jujhar Singh, MD, capital markets at StanChart India, told PTI over the weekend.

“The final spread was tighter than fair value for a new five-year US dollar-bond issuance for SBI implied by the secondary trading levels (222 bps over US treasury now), which is a feat for a debut USD bond issuance,” Singh said.

The fixed rate senior unsecured notes or Regulation S bonds (RegS bonds) raised in US dollar, carry a coupon of 3 per cent per annum payable half yearly and mature in 2018, he said, adding, “The pricing got tightened by 25 bps from the initial guidance and 5 bps from the final guidance to 230 bps over the US treasury as investors lapped the opportunity to buy into the domestic banking sector.”

Regulation S bonds or RegS bonds are those offered to non-US residents and qualified institutional buyers (under an exception to US securities laws enacted in 1990) and do not enjoy the same legal protection as other issues enjoy.

The bonds attract a coupon of 3 per cent and are priced at 99.687 to yield 3.068 per cent, which represents a 230 bps spread over the US treasuries, he added.

However, HDFC Bank refused to comment on this.

“The T+230 bps spread confirms investor recognition of HDFC Bank’s strongest credit metrics (vis—a—vis all other domestic banks), and establishes a new tight benchmark for domestic private sector bank issuers,” he said, adding that it was able to get such a tight deal thanks to the $5-billion worth of demand from more than 250 accounts.


Source: thehindubusinessline

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Bank of Baroda looks to boost profits from global operations

Bank of Baroda will rebalance its international portfolio to improve profitability of its overseas operations, its recently appointed Chairman and Managing Director, S. S. Mundra, has said.

Currently, this public sector lender has 98 outlets in different countries, accounting for about 25 per cent of the bank’s profits in a financial year.

As much as 30 per cent of the bank’s overall business comes from international operations. BOB will soon open a full-fledged branch at Dubai International Financial Centre.

The aim is to enhance the share of international operations to overall profit of the bank to 30 per cent, from the current 25 per cent, said Mundra, who assumed charge of his new role in end-January.

Mundra, who will have a limited tenure at the helm of BOB (he will retire in mid-2014), made it clear that he will not look for aggressive topline growth in international operations in the present global economic scenario.

BOB would aim for more fee-based earnings to improve the profitability of international operations.

“There is lot of scope to rebalance the portfolio in international operations to further improve the profitability from overseas operations,” Mundra told Business Line in an interview during his visit to the Capital on Saturday.

‘Premium on continuity’

Mundra, who called on the Finance Minister P. Chidambaram at the latter’s office on Saturday, said there would be a “premium on continuity” at the bank during his tenure.

“The bank is doing very well. No need for suddenly changing the course. If the bank had not been doing well, there is a need for revamp”.

At the same time, he admitted that in the last two quarters the bank had seen some strain in loan quality in the backdrop of slowdown in India and difficult economic conditions abroad.

“We will enhance our focus on asset quality and recovery,” he said.

Given that the industrial sector is seeing a slowdown, BOB also wants to slightly rebalance the domestic portfolio by leaning more towards MSME (micro, small and medium enterprise) and retail sectors.

HR focus

Mundra also said that he would to continue focus on human resource issues and create a leadership pipeline at the middle- and senior-management levels.

To bolster the supply of entry level staff, BOB entered into a tie-up with Baroda Manipal Institute a few years back.

Plans are now afoot to get into similar tie-ups with other institutions as well, Mundra said, adding that the Baroda Manipal arrangement would be strengthened further.

Public sector banks are faced with a huge HR challenge as a large percentage of senior management are coming out of the banking system because of superannuation.

Srivats.kr@thehindu.co.in


Source: thehindubusinessline

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