Canara Bank opens 35 branches; takes total number to 3,212

BANGALORE: State-owned lender Canara Bank today on 21/02/2011 opened 35 branches across the country, taking the total number of branches to 3,212.

Apart from this branch network, the bank also has 2,150 ATMs to serve a clientele base exceeding 38 million at present, Canara Bank said in a statement.

These 35 branches have come up in 14 states. Of these 35 branches, 31 branches are in rural and semi-urban locations, it added.

At the beginning of the current financial year, the Bank had drawn up a plan to roll out 200 branches by March 2011.

So far, the bank has opened 170 branches, including opening up of 100 branches on its Founder's Day on November 19, 2010.

As in December, 2010, the bank's total business has crossed Rs 4.5 lakh crore and it posted a net profit exceeding Rs 1,000 crore each for the three consecutive quarters during FY11.

Source: EconomicTimes

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SBI has option of pre-payment

MUMBAI: State Bank of India will offer different rates of returns on bonds for retail and non-retail investors. Non-retail investors, who include institutions and high net-worth individuals who invest in bulk, will receive 9.3% for 10 years and 9.45% for 15-year investments. The bank has an option to pre-pay investors in the 10-year bonds after 5 years and after 10 years for 15-year bondholders.

Senior officials of the bank said that details regarding the opening of the issue would be announced on Tuesday. Although these investments are long-term in nature, investors are assured liquidity through the listing of these bonds.

Investment bankers who are distributing the issue say earlier experience suggests that SBI is bound to receive a huge oversubscription on first day itself. "There are many banks that are offering 9.5% and above on fixed deposits. But these investments typically are for one-two years and interest rates are widely expected to come down in the long-term," said an investment banker.

SBI's earlier retail bond issue, which offered a much lower return, was a huge success with the bonds being sold out on the first day.

Successful investors got an opportunity to make equity-like gains as the bonds were listed at a 5% premium on listing. While the returns on the bonds are even better, the listing position would depend on the extent of unsatisfied demand in the public issue. Prices of SBI's earlier bonds fell marginally on Monday, but the securities continue to trade at a significant premium over the issue price.

Although the size of the issue is minuscule compared to the bank's balance sheet, the issue is part of an ongoing programme to develop a market for long-term resources. The bank presently funds all its long-term loans, which include home loans and loans to the infrastructure sector, through core savings deposits and medium-term deposits.

By-TOI

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Reliance MF launches first SIP in gold

Reliance Mutual Fund launched India's first systematic investment plan (SIP) in Reliance Gold Savings Fund, wherein premium will be made on a monthly basis.


CEO of Reliance Capital Asset Management Sundeep Sikka said it was the first SIP in gold introduced in the domestic mutual fund industry aimed at helping investors to accumulate the yellow metal in small amounts regularly.


Sikka said that in line with the growing gold investment demand, coupled with India's culture for buying gold, "We are introducing SIP in Reliance Gold Savings Fund. This is aimed at cultivating a regular savings habit among investors to accumulate gold in small amount through the SIP mode."


The fund allows small regular investments as low as Rs 100 per month and in multiples of Re one thereafter. According to Sikka, Reliance Gold Savings Fund is the only fund in the market which will enable investors to invest in gold in a paper form without the need of a Demat account as it provides the facility to invest through online medium and physical application mode.


He said that the new fund offer was a convenient way to diversify investment portfolio and reap the returns of gold from a long-term perspective.


To a query, he said the fund enables the investor to avail long-term taxation benefits from first year.




Source: Financial Express

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Indian banks' margins likely to shrink in 2011

KOLKATA: The net interest margins of Indian banks are expected to shrink in 2011, despite an estimated growth of 20-22 per cent in loans, due to a rise in interest rates and lenders will be forced to raise deposit rates to manage liquidity.

Rating agency Fitch's report on the 'Indian Banks Outlook , 2011' said while banks have the contractual ability to pass on such hikes to borrowers, they may prefer to absorb part of this increase at the cost of NIM margins in the face of competition.

"Further, strong loan growth, together with tight rupee liquidity, is likely to increase the proportion of higher cost wholesale funding, putting further pressure on margins," Fitch Senior Director Ananda Bhoumik said.

"Retail deposits and customer current accounts will, however, remain the dominant funding sources, together accounting for about 65 per cent of total deposits," he added.

However, the impact of lower NIMs in a rising interest rate scenario will be partly balanced by subdued credit costs as non-performing loan accretion from restructured loans subsides, Fitch said.

The report said additional provisions for new pension schemes in government banks may be routed directly through equity or amortised and early estimates suggested the impact on tier 1 capital ratio could be up to 50 basis points.

The long-term outlook of Indian banks is likely to stay stable, the report said.

Source: EconomicTimes

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Four PSBs jumpstart preferential issue process

Responding swiftly to Union finance ministry’s decision to infuse capital into public sector banks by way of preferential allotment of equity shares in favour of the government of India, four major PSBs on Saturday kickstarted the process of creating and issuing such shares to raise funds.

The board of directors of the four public sector lenders such as Indian Overseas Bank (IOB), UCO Bank, United Bank of India, and Corporation Bank have decided to initiate necessary steps to raise funds. The finance ministry in a February 15 letter had conveyed to the banks the government’s decision to infuse funds into certain public sector banks. As per the letter, while IOB would be getting Rs 1,054 crore; UCO Bank, Rs 940 crore; and United Bank of India, Rs 308 crore.

“We are working on the number of additional shares, which would be given to the government. As of December 31, 2010, the government holds 61.23% stake in the bank,” M Narendra, chairman and managing director of IOB, told FE. The bank has called for an extra ordinary general meeting on March 22.

While UCO Bank has scheduled its EGM for March 17, United Bank of India will hold it on March 23. The Corporation Bank will hold its EGM on March 15, for obtaining approval of the preferential allotment of equity shares.

While the Central government holds 63.59% in UCO Bank, it has 84.2% stake in United Bank of India. The Corporation Bank has 57.17% government holding.

The Central government had in October last announced the release of about Rs 8,700 crore to the PSU banks such as Bank of Baroda, Oriental Bank of Commerce, Andhra Bank, Dena Bank, IDBI Bank and Vijaya Bank.

Source: Financial Express

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