Andhra Bank’s business grows 17% in 2012-13

Andhra Bank’s business has grown by 17 per cent in the financial year ended March 31, 2013.“Our total business has touched Rs 2.24 lakh crore in 2012-13 compared with Rs 1.92 lakh crore in the previous year,’’ B.A. Prabhakar, Chairman and Managing Director, told Business Line.

Deposits and advances grew at 17 per cent and 18.4 per cent respectively while net interest margin was in the range of 3.25–3.3 per cent, he said.

Andhra Bank’s board will meet on May 2 to finalise Q4 and full-year numbers.

TARGET

For the current financial year, a 20 per cent growth in business has been targeted. “This will be driven chiefly by agriculture, small and medium enterprises and retail lending. If corporate demand picks up, we will also seize the opportunity there,’’ Prabhakar said.

There was untapped potential in agricultural lending, he said adding: “We are all hoping for a normal monsoon as agri portfolio can grow well further. There is still potential in agriculture which is not impacted by downturn.’’

The bank plans to open 200 new branches this year. Last year, it opened 160 branches. It will recruit 2,400 officers and clerks this year. Andhra Bank would also raise fresh capital this year and the modalities were being worked out, Prabhakar said while declining to mention the quantum of funds to be raised.

Though there is still some ‘stress’ on the asset quality, there is no major concern on the non-performing assets, he said.

HR FOCUS

To ramp up employee productivity, a human resources transformation initiative has been launched. “Detailed manpower mapping, succession plan and robust performance measurements are being done,’’ the CMD said.

On the up-coming policy review by the Reserve Bank of India, Prabhakar said a 25 basis points cut in key rates is likely as inflation has dropped to below six per cent.

naga.gunturi@thehindu.co.in


Source: thehindubusinessline

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Union Bank new office in Varanasi

Union Bank of India opened its second Field General Manager’s office at Varanasi in Uttar Pradesh.

The Varanasi FGM’s office has been carved out from the existing FGM’s office in Lucknow to give more support to the customers in 25 districts, with majority of them located in the eastern part of Uttar Pradesh.

The Varanasi FGM’s office was inaugurated by K.C. Chakraborty, Deputy Governor, Reserve Bank of India.

Union Bank has 694 branches in Uttar Pradesh. The bank’s total business mix of the State is Rs 46,634 crore comprising Rs 35,768 crore deposits and Rs 10,867 crore advances.


Source: thehindubusinessline

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State Bank chief wants 100 bps cut in CRR

A cut in Cash Reserve Ratio will be much more effective in bringing down lending rates than a repo rate cut, said State Bank of India Chairman Pratip Chaudhuri.

A strong votary of abolishing the CRR, the SBI chief said he will bring the base rate down by 20 basis points, if the Reserve Bank of India cuts the CRR by 100 basis points. Base rate is the minimum lending rate below which banks cannot lend.

Policy meeting

The RBI will review key policy rates in its annual policy meeting scheduled on May 3.

Currently, the CRR (the slice of deposits that banks keep with RBI) and the repo rate (the interest rate at which banks borrow short term funds from the RBI) are at 4 per cent and 7.50 per cent, respectively.

“Repo rate has very little or insignificant impact on the cost transmission. The only thing that can significantly bring down the base rate is the CRR. “Looking at the inflation numbers yesterday, I am encouraged to recommend a 1 per cent (100 basis points) reduction in CRR,” Chaudhuri said.

Also, a CRR cut will release more liquidity into the banking system. “The banks will be less desperate for deposits so it (liquidity) will have a more benign impact on the interest rates,” the SBI chief said.

THREE-DAY DEPOSITS

Chaudhuri, who mooted the idea of banks being allowed to introduce ultra-short term deposits of three days maturity, said there will not be any liquidity management issues if such a product is introduced.

Pointing out that absence of such a product is making banks uncompetitive, Chaudhuri reasoned that if banks can take care of seven-day deposits, then they can take care of three-day deposits too.

The SBI chief said that he has explained the new idea to the RBI top brass.

In any case, there is no rule saying that customers cannot withdraw money before the seven-day maturity period, he said. “So, if a seven- day deposit is stable then three-day deposits will also be stable.”

SB deposits

Chaudhuri pointed out that the entire savings bank deposits of banks constitute 25 to 40 per cent of their total deposits and they are withdrawable on demand.

satyanarayan.iyer@thehindu.co.in


Source: thehindubusinessline

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RBI meet in Mangalore

Reserve Bank of India (RBI) will conduct a meeting to listen to the grievances of the public in Mangalore on April 16.

A press release said here that RBI will conduct a ‘town hall meet’ for the benefit of customers of various banks at the auditorium of the corporate office of Corporation Bank in Mangalore at 11.30 am on April 16.

K.C. Chakrabarty, Deputy Governor of RBI, will be present. The purpose of the meeting is to listen to the grievances regarding deficiencies in services and problems while dealing with the banks.

Customers of all banks can take part in the programme, the release added.


Source: thehindubusinessline

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Union Bank hits global debt market with $500 mn bond issue

State-run Union Bank of India has hit the global debt market to raise around $500 million through bond issuance, said two merchant bankers working on the issue.

This has comes days after successful bond issuances by State Bank of India last week and a dozen of corporates in recent months.

“We have launched roadshows in the leading Asian and European finance centres on behalf of Union Bank of India last week, as part of the bank’s plan to launch a benchmark issue.

If the market condition is conducive, we will close the sale programme this week,” the merchant bankers told PTI today.

They also said, this is part of the medium term note (MTN) programme of the city-based bank and the fund will be deployed to meet its overseas fund obligations.

The bank’s head D Sarkar could not be reached for comments immediately.

It can be noted that last Friday, SBI set a new benchmark in bond pricing by selling $1 billion worth fixed rate five-year senior unsecured bonds at coupon 3.25 per cent, 87 basis points (bps) lower than the coupon it is paying to the bondholders of its previous $1.25-billion issue last July.

So far 11 companies through 13 issuances raised a whopping $7.5 billion this year, as rupee funds remain too costly at around 12-14 per cent, while foreign funds are much lower.

The highest pricing of these debts is just under 6 per cent, while the lowest coupon is a paltry 3 per cent that HDFC Bank is paying to its investors for its $500 million issue sold this January.

Last week, Essar Steel said it would dollarise its Rs 20,000 crore rupee loans if the RBI allows doing it. According to I-bankers, RIL, ONGC Videsh and Tata Steel are also planning to borrow abroad.


Source: thehindubusinessline

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