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Thursday, May 7, 2015

YES Bank case: HC reserves final order till May 12

The nearly two-year-long legal family dispute between YES Bank's two largest shareholders – Rana Kapoor and Madhu Kapur – may come to an end on Tuesday, May 12.

Without passing the judgment, the High Court has suggested that both the shareholders should reduce their stake to below 10 per cent. The judgment will be passed on Tuesday.

According to the High Court, if the shareholding is brought down below this threshold limit, the conflict of nomination of IP (Indian Partners) Representative Director gets resolved as they both will lose their rights to nominate directors.

At the end of March 31, 2015, Rana Kapoor, Managing Director & Chief Executive Officer of YES Bank owned 11.77 per cent stake in the bank, whereas Kapur and family owns 10.29 per cent.

Along with daughter Shagun Kapur Gogia, Madhu Kapur has been fighting for rights as the legal heir of the private bank's promoter to nominate directors on the bank's board.

As a part of the operative order the Judge has also made an observation that Gogia does not get a board seat. Madhu Kapur had also sought to nominate Gogia on the board.

Source : Thehindubusinessline
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United Bank net drops 78% to Rs. 105 cr on increased provisioning

Kolkata-based United Bank of India (UBI) reported a near 78 per cent decline in net profit to Rs. 105 crore for the quarter ending March 31, 2015.

The PSU lender had reported a net profit of Rs. 469 crore in the corresponding quarter last fiscal.

Increased provisioning by over 153 per cent to Rs. 676 crore during the fourth quarter dragged down profits. Provisioning in the corresponding quarter in the last fiscal stood at Rs. 267 crore.

Total income earned during the quarter moved up to Rs. 3,153 crore (a near 6 per cent increase) over the Rs. 2,983 crore it reported in the year-ago period.

For the full year (FY-15), UBI reported a net profit of Rs. 256 crore. It had reported a net loss of Rs. 1,213 crore in FY-14.

Total income in FY-15 stood at Rs. 11,927 crore (Rs 11,806 crore).


The bank brought down its gross non-performing assets to Rs. 6,553 crore, down by nearly 8 per cent from the Rs. 7,118 crore it reported in FY-14.

Gross NPAs in FY-15 improved to 9.49 per cent from 10.47 per cent last year.

Net NPAs stood at Rs. 4,081 crore for the full year, down from the Rs. 4,664 crore it reported in the year-ago-period.

Net NPAs improved to 6.22 per cent (7.18 per cent).

The UBI stock closed at Rs. 27.40, down by 0.18 per cent at the BSE on Thursday.

Source : Thehindubusinessline
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Muthoot Fincorp eyeing for PE funds

Muthoot Fincorp, the flagship company of Muthoot Pappachan Group, is looking at private equity (PE) funding of Rs. 600-800 crore this fiscal.

The company is also planning to come up with public issue of bonds worth Rs. 550 crore sometime in June. For the full fiscal year 2016, it may do public issue of bonds up to Rs. 1,000 crore.

The funds will be deployed in growing the existing business towards income generation for the wider segment of the population at the bottom of the pyramid.

Thomas John Muthoot, Chairman of the Group said, “Our financial services business were primarily targeted towards financial inclusion and will continue to do so.”

It is also encouraging households to recycle old gold jewellery holdings and plans to open 20 collection centres in the next two years beginning with a centre in Chennai next week.

The micro finance business unit of Muthoot Fincorp, Muthoot Microfinance that secured an NBFC-MFI licence earlier this year, is planning for a capital infusion of Rs. 200 crore through promoter funding.

Muthoot Microfinance is also eyeing for a PE funding by 2016-17 aiming to double its asset book to Rs. 3,000 crore from Rs. 1500 crore in two years.

Source : Thehindubusinessline
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Over 2 lakh enrolled for social security schemes in Gujarat

Even before its scheduled launch on May 9, two of the ambitious social security schemes - Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyothi Beema Yojana (PMJJBY) have received overwhelming response in Gujarat, informed bank officials here.

As per the data shared by Dena Bank's Gujarat region office, total over 2,82,000 enrolments have taken place in PMSBY, while over 72,500 for PMJJBY since May 1.

The insurance schemes that will enable the every citizen to get a life insurance under PMJJBY and an accident insurance under PMSBY for an annual premium of as low as Rs. 330 and Rs. 12 respectively.

The schemes provides insurance cover of Rs. 2 lakh each for life insurance and for accidental death, while Rs. 2 lakh cover is given for complete disability due to accident and Rs. 1 lakh for partial disability.

An individual having a bank account in public or private or regional rural banks with CBS facility can enrol to this insurance.

"There is an overwhelming response to both the schemes in Gujarat. We expect to get about 20 lakh enrolments in total of all banks by the end of this month," said Kailash Chandra Chhipa, GM & SLBC convenor Dena Bank - Gujarat.

Interestingly, as per the available data on the daily status of the enrolment of the two schemes, private sector banks have shown negligible enrolments as compared to their public sector peers. The data showed that for PMSBY, all the private sector banks put together had only 146 enrolments till May 6, against 28,069 by RRBs and 2,54,000 by PSU Banks.

Similarly, for PMJJBY, the private sector banks have not started enrolling as yet, while RRBs have about 3,000 enrolments and PSU banks have a total of over 69,400 enrolments.

Source : Thehindubusinessline
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Wednesday, May 6, 2015

SBI to auction retail store Loot (India)’s property

State Bank of India (SBI) is set to auction the outlets of Loot (India) - the retail store that gained popularity few years ago for selling multi- branded apparel at 25% to 50% discount. The company has stopped paying dues amounting to Rs 43 crore to country;'s largest bank which has prompted them to auction the property. The bank has issued a notice to e-auction Loot (India) property located in Mumbai at Mahim for a reserve price of Rs 7.5 crore.

In 2010-11, Loot (India) Ltd promoted by Jay Gupta has close to 145 outlets in 82 cities which is now reduced to handful of outlets. It faced financial crunch just during the time other retail outlets like Subhiksha and Vishal Retail were forced to shut shop as their revenue did not match their expenses. Loot (India) could not tap the equities market to raise money due to difficult market conditions nor was it able to rope in a strategic investors which made it difficult for the company to fund its project.

On Wednesday, SBI said that it has has invited bids for the property for an online auction on June 12 between 12.30 pm to 1.30 pm. The outstanding dues of the company inclusive of interest and principal is close to Rs 60 crore, sources. The Mahim property, which would be first in line to be auctioned, is located on the ground floor having 360 square feet.

In March this year, SBI had put on block 300 properties of defaulting customers for online auction. These included offices, shops, factory buildings and residential apartments spread across 25 cities valuing Rs 1200 crore. The banks sold about 130 properties online realising Rs 100 crore. The bank has now decided to conduct online auctions every quarter of stressed assets.

SBI is driving hard to recover its overdues as it's gross non-performing assets (sticky loans before provisioning) has touched Rs 61,991 crore or 4.9% of total advances as on December 2014. Another, Rs 7043 crore loan slipped into the NPA basket while Rs 4092 crore loans were restructured in the December quarter, which is eating into the bank's profits.

Source : Economic Times
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Federal Bank, New India Assurance tie up to offer insurance

Kerala-based Federal Bank has tied up with New India Assurance Co. Ltd to implement Pradhan Mantri Suraksha Bima Yojana, the personal accident insurance scheme announced by the Government for savings bank account holders in the age group of 18 to 70 years.

“The Insurance scheme provides a cover of Rs. 2 lakh against death/permanent disability caused due to accident, at an annual premium of Rs. 12.

All Savings Bank account holders in the age group of 18 to 70 years are entitled to join the scheme. The scheme commences from June 1, 2015. Customers of Federal Bank can join the scheme by submitting the duly filled in consent cum declaration form at their branches before May 31, 2015.

Source : Thehindubusinessline
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PNB cuts lending rate by 0.25%

Joining its peers, Punjab National Bank on Wednesday cut its base rate by 0.25 per cent to 10 per cent, which will lead to lower EMIs for its customers.

The bank has revised downwards the base rate or minimum lending rate to 10 per cent from 10.25 per cent, effective May 7, PNB said in a statement.

All loans linked to its base rate will now come down by at least 0.25 per cent.

Yesterday, Bank of Baroda, too, had cut base rate by 0.25 per cent to 10 per cent.

The country’s largest lender, SBI, had reduced its base rate by 0.15 per cent to 9.85 per cent, effective April 10.

Banks such as SBI, ICICI Bank, HDFC Bank and Axis Bank had cut lending rates by up to 0.25 per cent after RBI Governor Raghuram Rajan’s tough talk with bankers on April 7.

However, many others have not revised their rates yet.

Source : Thehindubusinessline
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Tuesday, May 5, 2015

Kotak Mahindra Bank Q4 net jumps 29%; board approves 1:1 bonus issue

Kotak Mahindra Bank has posted a 29 per cent jump in net profit for the fourth and last quarter ended March 31, 2015 at Rs. 527 crore against Rs. 407 crore in the three-month period a year ago.

Total income has increased 27 per cent to Rs. 3,249 crore during the quarter from Rs. 2,553 crore during the quarter ended March 31, 2014.

The board has approved the issue of bonus shares in the ratio of 1 equity share for every 1 share held subject to the approval of the shareholders at its annual general meeting.

The board has also recommended a dividend of Re 0.90 per share.

On a consolidated basis, Kotak group has posted a 38 per cent rise in profit after tax of Rs. 913 crore for Q4FY15 compared with Rs. 663 crore in Q4FY14.

Net interest income

Net interest income, the difference between interest earned and interest expended, grew 16 per cent to Rs. 1,123 crore during the January-March quarter from Rs. 966 crore in the corresponding quarter in the previous fiscal.

Asset quality also improved as gross non-performing assets (NPAs) declined to 1.85 per cent of total gross loans as on March 31, 2015 from 1.98 per cent in the March 2014 quarter, and sequentially down from 1.87 per cent in the December quarter.

Net NPA too declined to 0.92 per cent from 1.08 per cent during the year-ago quarter and 0.97 per cent in the previous quarter.

Ravi Shenoy, AVP - Midcaps Research, Motilal Oswal Securities, said, “Kotak Bank reported numbers above our estimates with a 38 per cent consolidated PAT growth and 30 per cent profit growth for the bank. Asset quality was stable QoQ with no sales to ARCs. Liability side saw CASA (current and savings account) at 36 per cent.”

The shares of Kotak Bank surged 6.54 per cent to close at Rs. 1,423.65 on the BSE.

Source : Thehindubusinessline
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South Indian Bank reports 40% drop in FY’15 net

South Indian Bank has registered a 40 per cent drop in its annual net profit at Rs.307.20 crore ended March 31, 2015 against Rs.507.50 crore in the previous fiscal year.

The operating profit has also shown a 7.55 per cent decrease in the fourth quarter at Rs.816.27 crore against Rs.882.89 crore.

The decline in operating profit was due to increased provisioning requirements towards employee benefits based on the recently concluded industry-wide wage settlement and actuarial liability on superannuation benefits due to softening of market yield, V.G.Mathew, Managing Director and CEO said.

According to him, the year was challenging due to stress in corporate credit book especially in sectors like power and infrastructure. The increased provisions on account of stressed assets and provisions towards employee cost brought the pressure on net profit.

The net operating income registered a 5.45 per cent increase from Rs.1,767.24 crore to Rs. 1,863.31 crore. The growth in non interest income was Rs.128.61 crore during the year.

The financial year 2015 was a year of consolidation and the bank has introduced several measures aimed at refocusing on the retail segment for advances as well as deposits with very encouraging results.

During the period, he said the bulk deposits have been brought down from 29 per cent to 21.67 per cent and the core deposit recorded an increase of 20.61 per cent and CASA grew by 8.77 per cent. The NRI portfolio also grew commendably at 29.17 per cent.

He pointed out that the bank has decided to pass on the benefit on account of revision in liability pricing during the last year to the customers and has reduced the base rate by 30 basis points respectively.

There are plans to increase the branch network, extension counters and ATMs by 25, 25 and 150 units respectively during the current year. The current level of CRAR is comfortable and there is sufficient headroom for raising fresh equity/ bonds in case of need, he added.

Source : Thehindubusinessline
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