Bank of Baroda Q3 profit declines 68% on higher provisions, one-time tax liability

Bank of Baroda has posted a sharp decline of 68 per cent in net profit at Rs. 334 crore, in the October-December quarter of FY15 due to hike in provisions for bad loans, higher expenses and decline in margins.

The public sector lender had reported a net profit of Rs. 1,048 crore in the year-ago quarter.

“Provisions and contingencies (excluding tax provisions) of the bank increased by a significant 65.7% (y-o-y) during Q3FY15 to Rs. 1,262 crore (Rs 762 crore in Q3FY14) due to lumpy provisions against some structural non-performing loans,” the bank said in a statement.

Moreover, operating expenses, which increased 14 per cent, also weighed on the profits.

Net interest income

Net interest income increased 7.5 per cent to Rs. 3,286 crore in the third quarter ended December 2014 compared with Rs. 3,057 crore in the same quarter last year. Other income was up 17 per cent at Rs. 1,090 crore against Rs. 932 crore.

“The bank’s domestic net interest margin (NIM) also eased to 2.92 per cent in the quarter from 3.02 per cent in Q2, FY15 due to a near stagnant growth in non-food credit of the banking industry,” the bank said.

Post results, at 2.10 pm local time, the shares of Bank of Baroda were trading down by 11 per cent at Rs. 193.40 per share on the Bombay Stock Exchange.

Gross, net NPAs

Gross non performing assets (NPA) ratio as a percentage of total loans increased to 3.85 per cent as on December end 2014 from 3.32 per cent a year ago.

Net NPA ratio also worsened to 2.11 per cent from 1.88 per cent. Both gross and net NPA figures reflect the continued stress in economic environment and the ongoing structural issues.

Cash recovery (from NPA plus from the written off accounts) during April-December FY15 stood at the improved level of Rs. 1,205 crore (Rs 832 crore in April-December FY14), while the upgraded assets amounted to a better level of Rs. 1,120 crore (Rs 633 crore).


Source : Thehindubusinessline

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Stable loan growth, treasury gains drive ICICI Bank net profit up 14% to Rs. 2,889 cr

ICICI Bank, the country’s biggest private sector lender, booked a 14 per cent rise in net profit at Rs. 2,889 crore for the third quarter ended December 2014 on the back of stable loan growth and treasury gains. The net profit was at Rs. 2,532 crore in the year-ago quarter.

However, the asset quality continued to remain under pressure with higher provisions and increase in bad loans during the period.

“Growth was driven by strong retail growth and operating parameters…Given the subdued corporate and economic conditions, we continued to see additions to NPAs (non-performing assets)…It could be still 2-3 quarters more before we see improvement in the asset quality,” said Chanda Kochhar, MD and CEO of ICICI Bank.

Provisions for bad loans

Provisions largely towards bad loans jumped 41 per cent to Rs. 980 crore during the quarter compared with Rs. 695 crore in the year-ago quarter.

Net interest income

Net interest income or the difference between interest earned and interest expended grew 13 per cent to Rs. 4,812 crore from Rs. 4,255 crore in Q3FY14.

Non-interest income increased by 10 per cent to Rs. 3,091 crore from Rs. 2,801 crore on the back of treasury gains of Rs. 447 crore, though fee income grew by a meagre 6 per cent “mainly due to subdued growth on the corporate side”.

Net interest margin improved to 3.46 per cent in Q3FY15 compared with 3.32 per cent in Q3FY14.

Total advances, deposits

Total advances increased 13 per cent year-on-year to Rs. 3.75 lakh crore as on December 31, 2014 from Rs. 3.33 lakh crore as on December 31, 2013 driven by 26 per cent growth in retail accounting for 41 per cent of the total loans. Corporate growth accounting for 29 per cent, was tepid at 4 per cent.

"Retail growth was largely from home and auto loans…While we continue to take a calibrated approach on corporate loans,'' Kochhar said.

Total deposits increased by 12 per cent year-on-year to Rs. 3.55 lakh crore.

Gross, net NPAs

Gross NPA ratio deteriorated to 3.4 per cent (Rs 13,083 crore) of total advances as on December end 2014 from 3.05 per cent (Rs 10,399 crore) as on December end 2013. Net NPAs also increased to 1.27 per cent from 0.94 per cent.

Consolidated profit after tax also increased 14 per cent to Rs. 3,265 crore in the third quarter this fiscal from Rs. 2,872 crore in the third quarter of FY14.

At day’s close, shares of ICICI Bank ended 5 per cent down at Rs. 361.15 per share on the Bombay Stock Exchange.


Source : Thehindubusinessline

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Andhra Bank Q3 net zooms to Rs. 202 cr

Andhra Bank’s net profit increased four-fold to Rs.202 crore in the third quarter ended December 2014 compared to Rs.46 crore in the year ago period.

The decrease in cost of funds and increase in yield on advances pushed up profit. “Alternative liability sources other than deposits have been accessed at cheaper rates,’’ CVR Rajendran, Chairman and Managing Director, Andhra Bank, told news persons at a press conference here on Friday.

Net interest income increased to Rs.1,259 crore (Rs.868 crore) while total business grew 11.3 per cent to Rs.2.61 lakh crore. Net interest margin improved to 3.43 per cent ( 2.89 per cent).

Gross non-performing assets (NPAs) and net NPAs stood at 5.99 per cent (5.55 per cent) and 3.70 per cent (3.65 per cent) respectively.The bank was adversely affected by the delay in the roll-out of agricultural loan waivers in Andhra Pradesh due to problems such as multiple accounts. There are about Rs.880 crore agriculture NPAs in the State.

Andhra Bank, which had raised Rs.500 crore by issuing tier-I perpetual bonds recently, will raise another Rs.500 crore from the market before the end of the quarter. It may also raise Rs.1,000-1,500-crore capital in the first quarter of the next financial year.

The bank plans to open 200 branches in the next two months to take the total to 2,500 by March-end.

On Friday, Andhra Bank’s scrip gained 1.11 per cent to end at Rs.91.15 on the BSE.


Source : Thehindubusinessline

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IDFC’s Q3 net down 16%

Soon-to-be-bank IDFC Ltd said that its third quarter net profit fell 16 per cent as finance costs and provisions rose sharply. The infrastructure finance company posted a net profit of Rs401 crore in the quarter ended December 31, 2014 against Rs475 crore in the year-ago period.


Source : Thehindubusinessline

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Higher treasury income boosts Vijaya Bank Q3 net

Revision of base rate and higher treasury income boosted Vijaya Bank’s profits to Rs.37.40 crore in the third quarter of the current fiscal against Rs.11.39 crore in the same period last year.

The bank’s total income increased 14.89 per cent to Rs.3,302.67 crore (Rs.2,874.60 crore). Kishore Kumar Sansi, Managing Director and CEO, told reporters that the bank’s treasury income touched Rs.158 crore (Rs.16 crore) and revision of base rate protected interest margins. The bank made Rs.328 crore provision for NPAs.

Gross NPA stood at Rs.2,311 crore (Rs.1,953 crore). The percentage of gross NPA ratio stood at 2.92 per cent compared with 2.67 last year. Net NPA was at Rs.1,476 crore (Rs.1,131 crore). The percentage of net NPA ratio stood at 1.89 per cent as against 66.08 per cent last year.

Net interest income increased 7.19 per cent to Rs.1,668.98 crore from Rs.1,557.04 crore and net interest margin (NIM) was at 1.88 per cent (1.90 per cent).

Total deposits of the bank grew 8.12 per cent to Rs.2,03,187 crore (Rs.187,935 crore). Gross advances increased 8.26 per cent to Rs.79,136 crore (Rs.73,100 crore).


Source : Thehindubusinessline

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Dewan Housing seeks small finance bank licence

Housing finance major Dewan Housing Finance Corporation Ltd (DHFL) has filed an application seeking a licence for a `Small Finance Bank’ from the RBI.

The foray into banking operations would enable DHFL `transform into a more robust and scalable business model’ that was aligned with its long-term growth aspirations.

In a filing with the stock exchanges, DHFL said it had filed an application seeking a banking licence from the RBI for `Small Finance Bank (SFB)’. The HFC has been in existence for more than 30 years, focussing on the lower and middle-income groups. It said its vision, if granted a licence, was to emerge as a `Big Bank for Small Finance’.

It would, however, maintain its focus on its `core capabilities geared towards financial inclusion’, the company statement said.

Shares of DHFL closed at Rs. 471.50 today, down by Rs. 5.45 in a weak market on the BSE.


Source : Thehindubusinessline

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Home loan growth slows down

Aman, a 32-year old in suburban Mumbai, is not particularly excited about the interest rate cut by the RBI earlier this month.

“I want to buy a house at a place which is less than an hour’s commute from my work place. However, there is nothing available in my budget. A cut in the interest rate will barely save a few thousand on my EMIs. I don’t think it is a good enough reason for me to buy a home,” said Aman, who earns a salary of Rs.10 lakh annually.

This trend is the general sentiment in metros with real estate prices at high levels and no sign of “affordable housing”. Clearly, a rate cut is unlikely to lure consumers to take home loans.

Most banks have seen some consolidation in the housing loan portfolio and retail growth was primarily driven by vehicle loans, consumer durables and unsecured loans.

“Housing is not growing as much and though the interest rate cut will give a push to this demand, I do not expect the growth to pick up any time soon..,” said Jairam Sridharan, President, Consumer Banking at Axis Bank.

The pace of growth of home loans declined to 16.4 per cent in November 2014, from 18.1 per cent in the year-ago period, according to Reserve Bank of India data.

On the other hand, growth in consumer durables and other personal loans improved to 46.8 per cent (32.8 per cent in the year-ago period) and 16.2 per cent (13.3 per cent), respectively.

A 0.25 per cent reduction in base rate on a Rs.50-lakh home loan, with tenure of 20 years (average ticket size for metro cities), will lower the EMI by about Rs.830 per month if the bank’s interest rate gets lowered from 10.15 to 9.9 per cent.

This translates into a savings of only Rs.9,960 annually. With consumers finding it difficult to buy high-priced homes, the reduced EMIs are hardly a solace.

According to analysts, the repo rate (the minimum lending rate of banks) is likely to come down by a full percentage point (100 bps) over the next 12 months, which means the amount of saving on EMIs could be in the range of Rs.3,000-4,000 a month.

Bankers suggest the repo rate cut of 25 basis points (25 bps) is not enough, though the downward cycle of interest rates has started.

A larger cut in the days to come will lead to banks cutting base rates and therefore a significant drop of about 100 basis points will trigger some momentum in the home loan segment.

Affordable housing

However, the real estate market has witnessed a re-orientation and developers are now largely focusing on affordable homes. This will go a long way, though definitely not all the way, in bridging the existing wide gap between demand and supply of affordable homes, according to a report by real estate consultant Jones Lang LaSalle (JLL) India.

Anuj Puri, Chairman & Country Head, JLL India, said, “In 2015, developers will become more earnest about right-sizing and right-pricing their offerings. Smaller, yet better-designed and more efficient homes will define the residential real estate market in 2015, and selective corrections in some of the over-priced cities will help bring about faster sales for stagnated supply of larger configurations. Townships will become more prevalent, and the supply of luxury homes will moderate to align with the slow demand dynamics for these offerings.”


Source : Thehindubusinessline

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RBI welcomes `differentiated banking’ partnerships

Welcoming the tie-up between country’s largest mobile telephony player Bharati Airtel and Kotak Mahindra Bank for a payments bank, Reserve Bank of India deputy governor H R Khan has said such partnerships are crucial for the success of differentiated banks.

“If they have cost effective framework, use mobile and telco network, then they (small finance banks and payments banks) can be successful, otherwise the space is becoming rather overcrowded (with commercial banks),” Khan said, addressing an event organised by ETNow last evening.

The deputy governor also welcomed the deal between Airtel and KMB, saying the RBI has been pushing for such tie-ups for long.

“We have been trying for tie-ups for quite some time, not many experiments have really fructified but one should be encouraged by this initiative. The commercial viability and the business proposition of banks, if married to distribution and technology of telcos, can work wonders for financial inclusion,” Khan told reporters.

With speculation that a host of telcos, including the state-run BSNL, Vodafone and Telenor are interested in entering the differentiated banking fray, Khan also hinted that more such tie-ups might be in the works.

“I presume so. I am hopeful and the buzz I get is that quite a few people are excited both for the PB and SFB,” he said, when asked about other partnerships.

Under the KMB and Airtel tie-up announced yesterday, the banking entity will have 19.90 per cent stake in the payments bank, once it is granted the licence.

The RBI kick-started the process of `differentiated banking’ with the release of the final guidelines for small finance banks and payments banks. The last day for applying for interested parties has been extended till February 2 and the RBI has promised to eventually grant licenses “on tap.”

The Payment Banks are aimed at encouraging savings and help with the remittances, while the Small Finance Banks will be small-ticket lending in a smaller area of operation.


Source : Thehindubusinessline

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Oriental Bank of Commerce net down 91% in Q3

Oriental Bank of Commerce (OBC) on Thursday reported a 91 per cent decline in net profit for the quarter ended December 31, 2014, at Rs. 19.56 crore (Rs 224.30 crore).

The total income of the bank for the quarter under review increased by 7.98 per cent to Rs. 5,458.79 crore (Rs 5,063.98 crore).

The third quarter financial performance was weighed down by a sharp increase in provisions at Rs. 885.14 crore, reflecting a 57.75 per cent increase over the provision level of Rs. 561.10 crore in the same quarter last fiscal.

For the nine months period ended December 31, 2014, OBC reported a net profit of Rs. 675.52 crore. This represents a 18.52 per cent decline over net profit of Rs. 829.09 crore recorded in same period last fiscal.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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HDFC Q3 profit up 12% on good demand in small towns

Housing Development Finance Corporation has posted a 12 per cent growth in its third quarter net profit aided by higher demand for home loans in the tier - II and tier - III towns.

In the three month period ended December 31, 2014, the Mumbai-based HDFC posted a net profit of Rs. 1,425 crore against Rs. 1,277 crore a year earlier.

Total income was up 14 per cent at Rs. 6,871 crore.

As at December 31, 2014, the loan book stood at Rs. 2,19,951 crore as against Rs. 1,92,284 crore as at December 31, 2013, the company said in a statement.

Most of HDFC’s small-sized peers also posted net profit growth in double digits driven by higher demand for home loans from customers in an under-penetrated home loan market.

Indiabulls Housing Finance and Dewan Housing Finance Limited posted a net profit growth of 21 per cent and 16 per cent respectively. LIC Housing Finance Limited, however, posted only a 6 per cent net profit growth.

Mortgage to GDP penetration in India continues to be among the lowest in the world. It currently stands at a mere 9 per cent of GDP in India compared to about 80 per cent in major developed markets.

This, despite the fact that housing being one of the major requirements in the country. There is an estimated shortfall of 21 million houses in the country, majority of them (about 19 million) in the lower income group (LIG) segment.

The LIG segment remains largely outside the purview of housing finance loans from mainstream financiers, including banks, because this segment often lack the “required” documentation to get such loans.

Shares of the company closed down 2.61 per cent at Rs. 1,309.55 per share on the BSE.


Source : Thehindubusinessline

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Stop asking for ‘no due certificate’: RBI to banks

To ensure hassle free credit to all borrowers, the Reserve Bank of India has asked banks to dispense with obtaining ‘no due certificate’ from the individual borrowers in rural and semi-urban areas for all types of loans.

Instead, the central bank said banks should use an alternative framework of due diligence as part of their credit appraisal exercise.

The alternative framework could, among others, consist of: credit history check through credit information companies; self declaration or an affidavit from the borrower; CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India) registration; and peer monitoring.

The ‘no due certificate’ can be dispensed with in view of technological developments and the different ways available with banks to avoid multiple financing, the RBI said in a notification,

The central bank issued this directive as it has received complaints from borrowers that banks are refusing to grant loans without ‘no due certificate’, especially in rural and semi-urban areas.

Specifically, banks have been asked to dispense with obtaining ‘no due certificate’ from the individual borrowers (including self help groups & joint liability groups) in rural and semi-urban areas for all types of loans.

The loans will include loans under Government sponsored schemes, irrespective of the amount involved unless the scheme itself provides for obtaining ‘no dues certificate’.

In 2007, banks were advised to dispense with the requirement of ‘no due certificate’ for small loans up to Rs50,000 to small and marginal farmers, share-croppers and the like and, instead, obtain self-declaration from the borrower.


Source : Thehindubusinessline

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29 branch heads inducted into Corporation Bank Chairman’s Club

As many as 29 branch heads of Corporation Bank, who excelled in various areas of operation during 2012-13, have been inducted as members into the Chairman and Managing Director’s Club.

SR Bansal, Chairman and Managing Director, inducted the branch heads at a ceremony in New Delhi on Tuesday.

A press release by the bank said here the Chairman and Managing Director’s Club membership has been devised with selection parameters broadly premised on parameters such as average advances, clientele expansion, agriculture advances, retail advances, recovery, and non-interest income.

The bank has been administering the corporate award schemes for the past 32 years to enable employees realise their full potential, the release added.


Source : Thehindubusinessline

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DBS Bank launches Tab banking

Singaporean lender DBS Bank, which focuses on leding to SMEs, today launched Tab banking for its customers in the segment which will ease and fasten the account opening process.

The new initiative named ‘AweSME Accounts’ will replicate the physical account opening form for SME accounts on the tablet.

“The initiative comes with in-built checks and balances that reviews the past data and ensures that the most frequent reasons for rejection are avoided, thus giving customers a smoother on-boarding experience,” bank’s head of small and medium enterprise, Amitabh Verma, told reporters here today.

The bank claims the initiative would help the SME customer open an account within four hours compared to the average industry time of 2-3 days.

To attract new customers, the bank has waived off the average quarterly balance charges for accounts under the new initiative for the first 12 months.

“With this new product we hope to increase our SME customer base by 30-40 per cent in the current year,” Verma said.


Source : Thehindubusinessline

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State Bank of Hyderabad Q3 net doubles to Rs334 crore

The State Bank of Hyderabad’s (SBH) net profit more than doubled to Rs.334 crore in the third quarter ended December 31, 2014, compared with Rs.119 crore in the corresponding quarter of the previous year.

This was driven by a 9.81 per cent growth in net interest income at Rs.1,086 crore (Rs.989 crore), strong growth in other income, and a decrease in provisions and contingencies.

“Intensive non-performing assets (NPAs) recovery efforts taken by the bank yielded results and the gross NPA ratio declined from 5.77 per cent to 5.32 per cent,” the bank’s Managing Director Santanu Mukherjee told newspersons here on Tuesday.

Net interest margin increased from 3.04 per cent to 3.26 per cent during the quarter. On the business front, there was 16 per cent rise in personal loans. The total business of the bank stood at Rs.2,22,089 crore.

During the quarter, SBH opened 81 branches, of which 19 were in unbanked rural areas. The bank has a total of 1,775 branches.


Source : Thehindubusinessline

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Karnataka Bank third quarter profit flat at ₹107 crore

Karnataka Bank posted flat net profit growth of Rs.106.94 crore during the third quarter of 2014-15 against Rs.106.7 crore in the corresponding period of the previous fiscal, on higher provisioning and employee costs.

Net interest income stood at Rs.302.05 crore (Rs.271.50 crore), and other income at Rs.162.83 crore (Rs.97.85 crore).

There was higher provisioning for actuarial liabilities on pension and gratuity.

Employee cost

The employee cost of the bank stood at Rs.187.72 crore (Rs.117.58 crore), and provisions (other than tax) and contingencies reached Rs.78.89 crore (Rs.40.41 crore) during the reporting quarter.

Gross and net NPA touched 3.44 per cent (3.65 per cent) and 2.41 per cent (2.23 per cent), respectively.

P Jayarama Bhat, Managing Director and Chief Executive Officer, told BusinessLine that the bank has, however, crossed the full last financial year’s profit in the first nine months of the current fiscal.

The net profit of the bank for the first nine months of the fiscal stood at Rs.317.03 crore (Rs.229.82 crore). Stating that there is a growth of 20.89 per cent in the sequential quarter, he said the bank recorded a net profit of Rs.88.46 crore in the September quarter as against Rs.106.94 crore in the December quarter.

Branch network

On the future outlook, he said the bank aims at a turnover of Rs.80,000 crore for 2014-15. “We are opening another 75 branches in some important places. All these should give us better business in the years to come,” he said.

On Tuesday, Karnataka Bank shares closed at Rs.144.60 on the BSE, down 2.33 per cent against the previous close of Rs.148.05.


Source : Thehindubusinessline

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YES Bank signs MoU with OPIC and Wells Fargo to support MSMEs

Private sector lender YES Bank has signed a memorandum of understanding (MoU) with the Overseas Private Investment Corporation (OPIC) - a development financial institution of the United States - to increase lending to micro, small and medium enterprises (MSMEs) in India.

Through this MoU, OPIC along with Wells Fargo Bank will be participating in a $ 220 million long tenor funding arrangement to YES Bank.

Wells Fargo will act as sponsor and co-lender to the project.

The proceeds will be used for on-lending to SME and MSME with a particular focus in underserved rural and urban markets in India.

The MoU was signed and exchanged between the visiting Elizabeth Littlefield, OPIC’s President and CEO, and Rana Kapoor, Managing Director and Chief Executive Officer (CEO), YES Bank in the capital on Tuesday.

Littlefield travelled with the U.S. President Barack Obama for participating in India's 66th Republic Day celebrations.

Srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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DHFL Pramerica Life reports Q3 net profit at Rs. 23.68 cr

DHFL Pramerica Life Insurance reported its consolidated profit after tax for the quarter ending December at Rs. 23.68 crore.

The company had posted a loss of Rs. 77.61 crore for the corresponding period last year, it said in a statement.

The insurer garnered Rs. 162.88 crore in new business premium in the third quarter of the current fiscal.

“We will continue to look for ways to add value to our customers’ lives by strengthening our distribution, improving our service capabilities and offering differentiated product solutions.

“With our differentiated approach, we aim to become the most preferred life insurance partner for our customers and distributors,” DPLI Managing Director and CEO Anoop Pabby said.

The company currently insures over 3 million lives and has 69 branches across the country.

DPLI is a joint venture between Dewan Housing Finance Corporation (DHFL) and Prudential International Insurance Holdings (PIIH), a fully-owned subsidiary of Prudential Financial, a financial services leader headquartered in the U.S.


Source : Thehindubusinessline

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RBI raises concerns over State Bank of Sikkim's functioning

The Reserve Bank of India has raised concerns over the State Bank of Sikkim, which does not come under any regulation or jurisdiction since the Banking Regulation Act 1949 and the Companies Act do not extend to it.

In a letter to the central government, RBI has expressed serious reservations about the regulatory vacuum that the State Bank of Sikkim is allowed to function in, said a government official, who did not wish to be named.

"RBI has pointed out that since the bank does not come under any jurisdiction, financial and operational issues have arisen," the official said, adding that the banking regulator is concerned about protecting the interest of depositors. The State Bank of Sikkim's balance sheet has not been audited for the past five years and the RBI has pointed out in the letter that the bank's name could mislead depositors since it sounds as if it is an affiliate of forming loans (NPAs) or bad loans are high," said another official aware of the issue.

State Bank of Sikkim's managing director and chief executive HK Chhetri refused to comment on the bank's financial status although he confirmed that talks are on between the state and the central government to resolve the issue.

"It is because of the legacy issues. State government is the majority shareholder and they are in talks with all parties concerned," he said. Set up in 1968, State Bank of Sikkim has 35 branches. A bank official explained that since Sikkim joined the Indian Union in 1975, it has been granted special status under Article 371 F of the constitution. the State Bank of India (SBI), the country's largest bank. "If tomorrow there is a bank run, we will not be able to do anything. Since no rules apply, there is no DIGC (Deposit insurance and Credit Guarantee Corporation) cover," added the official.

Source : Economic Times

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Union Bank to open branch in Sydney

The Union Bank of India (UBI) will open its branch in Sydney by the end of this month, a top official has said.

"We are going to open a branch of the bank at Sydney on January 30. The bank also plans to open branches in Africa for further strengthening its global footprint," UBI Chairman and Managing Director Arun Tiwari told PTI.

Presently, the bank has a representative office in Sydney.

UBI recently opened a branch at Antwerp in Belgium. Apart from that, the bank has branches in Dubai, Hong Kong and London and representative offices in Beijing, Shanghai (both in China) and Abu Dhabi, he said.

Tiwari was speaking on the sidelines of a function to inaugurate a cash depositing kiosk here today.

"We will put up 500 more such machines across India which will be very useful to the customers," he said.

"The Union Bank of India has come up with a plan to strengthen its loan portfolio in retail, agriculture and MSME (micro, small and medium enterprises) sectors in 2014-15, thanks to the initiative taken by the Government of India and Reserve Bank," Tiwari said.

"Our focus for this year is on the RAM (retail, agriculture and MSME) sectors and we hope that the execution of our plans during the year will boost demand for industrial credit," he said.

Union Bank has the vision of becoming the top choice of customers by building beneficial and lasting relationship with them through a process of continuous improvement. The bank aspires to be the no. 1 retail bank in customer service excellence by 2020, Tiwari said.

The global business of the bank as on December 31, 2014 stood at Rs 5,34,051 crore, with deposit of Rs 3,02,782 crore and advances of Rs 2,31,269 crores. UBI had capital adequacy ratio of 10.30 per cent at the end of December 2014.

As part of pursuing the goal of financial inclusion in Gujarat for 2014-15, the bank has adopted 155 girl children in Vadodara region and paid Rs 4,000 per girl child, he said.

Under the Pradhan Mantri Jan Dhan Yojna, the bank has opened 2,43,393 accounts till January 21 in the state with a balance of Rs 5.85 crore and issued 1,79,624 rupay debit cards, he said.

"We have made provision for extra burden that is to be borne by the bank following the proposed hike in salaries of employees after finalisation of wage revision settlement, for which negotiations are taking place between the Indian Banks Association and the United Forum of Bank Unions," he said.

Source : Economic Times

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HDFC Bank launches 11 toll-free numbers to cater to 32 nations

HDFC Bank has launched 11 international toll-free numbers to cater to 32 countries for phone-banking assistance for its pre-loaded forex card users as part of customer convenience initiative.

The private sector lender on an average issues 12,000 pre-loaded forex card every month. The card can be issued in 18 different currencies including Euro, Yen, Pound, Dollar, South African Rand and Oman Riyal.

"The toll-free numbers are intended to provide enhanced convenience and accessibility for customer travelling overseas with our pre-loaded forex card," HDFC Bank senior executive vice president Parag Rao said.

The business of issuance of such cards are growing at 25 per cent year on year, he said, adding that the bank offers following services such as balance enquiry, statement request, activating back-up card etc.

One toll-free number would cover 22 nations while remaining numbers are for 10 different nations including the USA, UAE and Singapore.

Customers can also get their recharge done through phone-banking, he added.

Source : Economic Times

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IRDA mulls no fee for change in nomination

Observing policyholders’ right to effect changes in nomination, sectoral regulator IRDA is proposing to do away with the practice of charging fee for such alterations by life insurance companies.

The Insurance Regulatory and Development Authority of India in a draft on ‘Fee for Registering Cancellation or Change of Nomination by the Holder of a Policy of Life Insurance’, has invited comments from stakeholders by February 2, 2015.

“On a comprehensive review...it may be observed that the holder of a policy of life insurance has a right for effecting a nomination and for registering such nomination for the first time be it at the time of effecting the policy of life insurance or at a later time, no fee shall be charged by the life insurers,” said the exposure draft.

Presently, life insurance companies have to give a written acknowledgement about registering a nomination or a cancellation or change thereof and are allowed to charge fee for registering such cancellation or change.

The exposure draft also proposes for no registration fee for a nomination and furnishing a written acknowledgement.

Further, it said registration changes or cancellation of nomination may vary for policies kept in electronic format and there is need to treat these kind of policies differently in terms of levy of fee.

”...registering the nomination or cancellation or change of nomination shall be regarded as important policy holder services.

“As such nomination helps even the life insurers to seamlessly discharge their liability in the event of happening of the contingent event covered under a policy of life insurance,” it said.

The exposure draft has also proposed to fix the upper limit of fee allowed to be collected by life insurers subject to which life insurers will have the flexibility to decide in levying any lower amount.

On the cost-benefit front, it said that there are no significant financial implications on insurers for effecting such changes.

”...it is expected that the number of policies where a cancellation or the change of nomination is effected would be significantly less, therefore the financial implications of charging the fee for change or cancellation of nomination to the policyholder are also not significant,” it added.


Source : Thehindubusinessline

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City Union Bank Q3 net profit up 15%

City Union Bank reported an over 15 per cent increase in its net profit at Rs 102.70 crore for the quarter ended December 31, 2014.

The bank’s net profit stood at Rs 89.09 crore in the corresponding quarter a year ago, its MD & CEO N Kamakoti told reporters.

A 25 per cent growth in operating profit and 44 per cent growth in total provisions besides restructuring of assets have spurred this growth.

Total business grew 9 per cent to Rs 40,171 crore even as deposits increased by 10 per cent to Rs 23,203 crore as on December 31, 2014 from Rs 21,116 crore a year ago, he said.

Gross and net NPAs stood at 2.12 per cent and 1.31 per cent, respectively, he said.

Responding to a query regarding lending to SpiceJet, Kamakoti said that the net exposure of Rs 100 crore has been “collateralised by immoveable collaterals’’, and that there was no overdue.


Source : Thehindubusinessline

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