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Saturday, January 4, 2014

Canara Bank raises Rs 1,500 cr

Canara Bank on Friday said that it has raised Rs 1,500 crore through the issue of Basel-III compliant Tier-II bonds.

This was over and above the Rs 500 crore that the Government has decided to infuse in into the public sector lender before March 2014.

For the proposed capital infusion from the Centre, an extraordinary general meeting of shareholders was held on December 30.

Source: Thehindubusinessline
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Indian Bank, IOB target prospective home buyers

In an attempt to target prospective home buyers, public sector lenders - Indian Bank and Indian Overseas Bank - are offering home loans at interest rates of 10.20 and 10.25 per cent, respectively.

Indian Bank is offering home loans at 10.20 per cent across various slabs irrespective of the tenure for people looking forward to build homes,” the city-based bank said in a statement.

Similarly, Indian Overseas Bank, as part of targeting women customers, is offering housing loan at 10.25 per cent, irrespective of the tenure and loan amount under the banks’ Subha Gruha scheme.

For other borrowers, the interest rates have been fixed at 10.25 per cent for loans up to Rs 75 lakh and 10.50 per cent for loans above Rs 75 lakh, it said. Both offers from the two banks are valid up to March 31, 2014, the statement added.

Source: Thehindubusinessline
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Indian Overseas Bank launches IOB-Connect card

Targeting young individuals, public sector Indian Overseas Bank  launched ‘Connect Card’, a new ATM cum Debit card in association with VISA that can be used for e-commerce across five lakh merchant outlets.

Though all IOB customers have been provided ATM cum Debit card, Connect Card is targeted at the younger generation aged between 10 and 28 years, the city-based bank said in a statement.

IOB Connect cards can be used at over five lakh outlets as well as for online shopping. Encouraging e-payments, the bank offers five per cent cash back offer till the end of this financial year, it said.

Besides, the bank also launched Channel Financing for its corporate, institutional and SME credit customers.

IOB Channel Financing is a facility for financing supply chain partners. All activities under Channel Financing are digitally signed and electronically exchanged for speedy disposal and effective management,” it added.

Source: Thehindubusinessline
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No new capital needed for 2 yrs post Rs 11.5K cr QIP: SBI

SBI will not require fresh capital for two years after its forthcoming Rs 11,500 crore qualified institutional placement goes through, and any overseas bond sale is expected only after the QIP.

“That (government infusion through a preferential issue followed by the QIP) is the process we are going to follow this year and it will see us for the next two years,” SBI Chairperson Arundhati Bhattacharya told PTI in an interview.

Post QIP, for which State Bank of India received shareholders nod earlier this week, government holding in the bank will go down to 58 per cent, she said.

“This will take the government stake to 58 per cent.

Thereafter, whether they will put money again and dilute again, whether they will dilute below 58 per cent, I do not have any (answer)... It is for the government to decide,” said Bhattacharya, who took over as the first woman chief of the state-owned lender in October.

She declined to comment on whether the bank will adopt the preferential allotment and QIP routes to remain adequately capitalised to meet the Basel III capital needs.

The government has promised to infuse Rs 2,000 crore through a preferential allotment of shares as part of its Rs 14,000 crore recapitalisation of the public sector banks this fiscal. It will be followed by a QIP issue of Rs 11,500 crore, which is slated to be completed by March.

Under the stricter Basel III capital requirement, SBI will need around Rs 2.3 trillion (Rs 2.3 lakh crore) in additional capital by March 2018 (when the Basel III norms are fully implemented). Of this, Rs 1.5 trillion is needed in core tier I capital, the bank’s then CFO Diwakar Gupta had said last July.

While the money raised from the QIP, FPO and preferential issues will form the core tier I, or equity, capital, the bond sales strengthen the tier II capital. The bank had yesterday raised Rs 2,000 crore in domestic bond sale.

On its $10 billion medium-term notes programme, under which it plans to raise money by issuing bonds in global markets, Bhattacharya hinted that there may not be any activity this fiscal.

The bank had raised $800 million last February as part of this. So far, it has used only around $4 billion out of the $10 billion MTN mandate since 2010.

“We have not yet done anything (overseas bond sale) this fiscal but we will look at it after we have done the QIP,” the Chairman said.

SBI counter was trading at Rs 1,717 down 1.46 per cent in a dull trade. The BSE 30-stock index, Sensex, was trading 80 points down at 1430 hours. The SBI scrip is down nearly 30 per cent since last fiscal, 2012-13.

Source: Thehindubusinessline
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KVB ties up with Bajaj Allianz for health card

Karur Vysya Bank has tied up with Bajaj Allianz General Insurance for the roll-out of a co-branded health card.

The formal launch of this card happened at Karur on Friday, with the Chief Executive of Karur Vysya Bank, K. Venkataraman, receiving the first card

The bank is looking to issue 25,000 health cards in three months. “And it will not be restricted to our customers, but any individual seeking a health cover,” a senior official of the bank said.

The entry age is between 18 and 65 years and children from the age of three months are eligible for cover along with parents

Bank sources told Business Line that such card holders would be able to get cashless service, including accident-related hospitalisation and death compensation benefit, at any of the 3,500-plus hospitals listed by Bajaj Allianz.

Reimbursement of claims is also possible within 14 days of submission of required documents, the source said.

Awareness campaign

The bank has flagged off a mobile health van to create awareness among the public in the semi-urban and rural pockets about health insurance.

This van will be stationed near the bank’s rural branches. It is equipped to provide free health check-up and will offer discount coupons on various healthcare services, including outpatient treatment, in a network of hospitals, the official said.

In the first leg, the vehicle will cover various cities/towns in Tamil Nadu, including Karur, Salem, Namakkal, Erode, Coimbatore, Tiruchi, Thanjavur, Dindigul and Madurai.

Source: Thehindubusinessline
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Sunday, December 29, 2013

Kotak Bank says seeing fall in home loan book growth

Private sector lender Kotak Mahindra Bank is witnessing a sizable reduction in its home loan book growth in the current fiscal at 10-15% levels on poor consumer sentiment, a senior official has said.

"For the past two years, our home loan book has been growing at 30-40%, but this year it has grown by only 10-15%," executive vice-president and head of retail assets Sumit Bali told PTI.

He said the poor market sentiment is the prime reason for the slowdown in home loan growth and the same trend is being witnessed by the realty sector as well where demand has slowed down.

The official of the bank, which had cut its home loan rates by up to 0.25% last week, said people decide on home purchases when they see certainty, which includes multiple factors like a low and stable inflation, steady job creation, etc.

If that does not happen, they tend to pull back and wait for certainty to emerge before making their decision, he said adding that one should ideally enter in a depressed market for the best valuations.

As of the September quarter, the bank's home loans had stood at Rs 11,307 crore and had posted a year on year growth of 17%.

Kotak Mahindra Bank, one of the youngest lenders among the domestic players, joined its larger peers SBI, ICICI Bank and mortgage major HDFC in cutting the home loan rate by 0.25% last week.

Bali said competitive environment and a reduction in cost of funds were the drivers for Kotak to cut its rates.

When asked about the impact of the move on margins, he exuded confidence that the bank will broadly be able to hold on to them and added that a pick up in volumes following the move will also help.

Source: Business Standard
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PSU banks raise over Rs 15,000 cr through QIPs

State-run lenders including SBI and IDBI Bank have lined up more than Rs 15,000 crore worth of share-sales to institutional investors to shore-up their capital base.

Apart from State Bank of India and IDBI Bank, Indian Overseas Bank, Dena Bank and Allahabad Bank has also evinced interest in raising funds through qualified institutional placement (QIP). Some more public sector banks are in the process of taking approvals from their boards for QIPs.

These banks are collectively planning to rake in over Rs 15,000 crore through the proposed share-sale to institutional investors. Many of these lenders are expected to raise funds next year.

This alternate resource mobilisation is over and above Rs 14,000 crore capital infusion to be made by the government for the public sector banks during this fiscal.

The funds will be used to boost the capital base of the banks to maintain future growth and Capital Adequacy Ratio (CAR) under new global risk norms.

The country’s largest lender, SBI, which is planning to mop-up Rs 9,576 crore through a QIP in January-March quarter, has already received government approval for it.

Besides, IDBI Bank plans to raise Rs 1,200 crore via sale of shares to institutional investors, Dena Bank - Rs 800 crore, IOB - Rs 350 crore and Allahabad Bank - Rs 320 crore.

Last week, private player Dhanlaxmi Bank had allotted 1.75 crore equity shares at Rs 38.25 a piece, aggregating Rs 67.22 crore to qualified institutional buyers through qualified institutional placement.

QIP is a capital raising tool whereby a listed firm can issue equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors.

Overall, Indian companies raised over Rs 12,000 crore in 2013 through QIP issuance, as against nearly Rs 10,000 crore garnered in the preceding year. However, the number of issuance declined to 21 in 2013 from 47 last year.

Market experts said attributed the growth in fund raising via QIPs to volatile market conditions and it was easier to raise funds from institutional investors.

Source: Thehindubusinessline
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Pradeep Kumar takes charge as MD Corporate Banking, SBI

State Bank of India has appointed P Pradeep Kumar as its Managing Director (Corporate Banking).

Kumar, as one of the four managing directors, will look after the corporate banking portfolio of the bank.

“ ...with effect from December 27, as per notification of government of India, P Pradeep Kumar will be the Managing Director & Group Executive (Corporate Banking) of State Bank of India (SBI),” the bank today said in a statement.

Kumar, a post graduate in statistics, joined SBI in 1976 as a probationary officer and held several key assignments including the bank’s US operations. He also served as the managing director of State Bank of Travancore.

Before moving to the present assignment, Kumar was deputy managing director and group executive of the corporate banking group, which looks after corporate accounts and project finance of the bank.

Source: Thehindubusinessline
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Banks' loans up 14.9 per cent y/y in two weeks to December 13: RBI Read more at: Read more at:

Banks' loans rose 14.9 per cent from a year earlier in the two weeks to December 13, while deposits grew 17 per cent, the Reserve Bank of India's weekly statistical supplement showed on Friday.

Outstanding loans rose 363 billion rupees to 57.01 trillion rupees in the two weeks to December 13.

Non-food credit rose 329.6 billion rupees to 55.94 trillion rupees, while food credit rose 33.4 billion rupees to 1.08 trillion rupees.

Bank deposits rose 462.9 billion rupees to 75.24 trillion rupees in the two weeks to December 13.

Source: Economic Times
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