Standard Chartered's income from Indian operations continues to fall

MUMBAI: Standard Chartered Bank's income from Indian operations has seen a further slowdown, said the bank in its interim management statement for the third quarter of 2011, released on Wednesday. Meanwhile, income for Standard Chartered Plc in the first nine months of 2011 has grown by a high single-digit percentage over the first nine months of 2010, said the bank in its statement. "Over the same period, operating profit before tax grew at a double-digit rate," it added.

The operating profit of the UK-based bank's Indian branches had plunged 39% to $378 million in the first half of 2011, for the first time in about six years.

"Income remains well spread by geography. Whilst we have seen a further slowdown in India, and Korea remains muted, we continue to see strong performances in Hong Kong and Singapore," said the bank in its statement. "Despite competition remaining strong across our markets, we are seeing a number of opportunities to reprice business and increase market share," it added.

India, which was the largest contributor to the Standard Chartered Group's profits in the first half of 2011, had slipped to the third position. Profitability from the bank's Indian operations has been under strain, following the tough macroeconomic environment, slippages of deals, increased competition and regulatory changes.

In such challenging times, the bank is expected to see a change of guard. In an internal announcement, bank employees have been informed that Sunil Kaushal, head of Standard Chartered Bank's operations in Taiwan, will head the bank's India operations, said a source in the know of the development.

However, this is subject to regulatory clearance. Neeraj Swaroop, Standard Chartered's regional chief executive officer of India and South Asia, will be relocating to Singapore as regional chief executive officer for southeast Asia.

Source: EconomicTimes

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Dena Bank aims to hit Rs 1.5 lakh cr mark by 2013

Public sector Dena Bank aims to achieve Rs 1.5 lakh crore business with a growth of 20% during this fiscal, according to a top bank official.

"We have set a target of Rs 1,50,000 crore by 2013," Dena Bank Chairperson and Managing Director Nupur Mitra, who assumed office today, said.

She said the bank reported 19.21% jump in total business at Rs 1,07,336 crore as of September 30, 2011.

On the outlook for this financial year, she said the bank would introduce gold loan and housing loans. "We plan to introduce gold loan scheme and housing loan. Already we have tied-up with 70-80 builders to sell [housing loans]," she said.

Besides, a revision of interest rates for savings bank accounts would be decided at the Asset Liability Committee meeting (ALCO), slated to be held this month.

She said the bank would lay special focus on Maharashtra and Gujarat as they have a significant presence there. "We have around 500 branches in Gujarat alone. With many auto majors, it is becoming a major hub," she said.

The bank has already opened 507 ATMs and aims to increase it to 757 by March 31, 2012, she said.

Source: Business Standard

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SKS Microfinance to raise Rs 900 cr via share sale

MUMBAI: Country's largest MFI SKS Microfinance today said it will raise up to Rs 900 crore through issue of shares to institutional investors.

The board of the country's only listed micro finance company has approved issuing equity shares through qualified institutional placement (QIP) to raise up to Rs 900 crore, SKS said in a filing to the BSE today.

The board also approved raising the authorised capital of the company to Rs 135 crore from Rs 95 crore.

SKS had raised Rs 1,654 crore by way of an initial public offering (IPO) in July last year.

The micro finance (MFI) industry is going through rough weather after the Andra Pradesh government introduced an act last year to regulate their activities.

The Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act, 2010, requires MFIs to declare interest rates upfront and disclose all details relating to their borrowers.

The Act has hampered microfinance activity in the state and MFIs that were accused of charging very high interest rates on the loans are now finding it hard to get funds from banks.

Micro finance -- the practice of giving small loans to poor people -- have come under intense scrutiny after a string of farmer suicides in the Andhra Pradesh, leading to the creation of an act to regulate their activities.

SKS Microfinance Chairman Vikram Akula said in the annual report that the provisions in the Andhra Pradesh MFI Act were hampering the company's growth in the state, resulting in a five per cent reduction in its overall loan portfolio.

Source: EconomicTimes

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Vizag commercial branch of SBI doubles biz volume

The Visakhapatnam commercial branch of SBI has doubled its business volume and added seven new corporate clients during the first year of its operations, according to Mr V. Narsi Reddy, Assistant General Manager and branch head.

He told presspersons here on Wednesday on the occasion of the first anniversary that the specialised branch meant for financing mid-corporateshad made remarkable strides during the year. “We began with a modest business of Rs 635 crore a year ago and now it has swelled to Rs 1,356 crore till date and by March-end we are likely to touch the Rs 1,500-crore mark. By 2013, we wish to take it up to Rs 2,000 crore,” he said.

He said there were six such branches of SBI in the State - four in Hyderabad, one in Guntur and one here. He said currently 20 mid-corporates were in the fold of the branch engaged in manufacture of steel, construction and infrastructure, petrochemicals, marine products, and hospitality sector.

“It is a one-stop shop for all financial services the corporates need. Any corporate with credit requirement of Rs 10 crore and above can approach us. Regardless of where the unit is located, we will finance it if the promoters hail from the region, our area of operation from Vijayawada to Srikakulam. The branch is equipped with all modern amenities and facilities the corporates need,” he said and urged the industrialists, traders and businessmen to make use of it.

“A relationship manager is attached to the corporates to pay special attention and a fully-equipped international banking division takes care of the forex needs of the corporate clients,” he said.

He said the interest rates would be reduced by two per cent or so, if the balance sheet of the client was really good or the project viable. The branch also accepts deposits, but its focus is on lending to corporates. It currently has Rs 56 crore in deposits.

Mr R. Srinivasu, Assistant General Manager, and the relationship manager, also spoke about the services being offered by the branch.

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Allahabad Bank Q2 net up 21% on interest income

Riding on the back of a rise in net interest income and higher margins, Allahabad Bank posted 21 per cent growth in net profit at Rs 488 crore for the quarter ended September 30, 2011, against Rs 403 crore during the corresponding period last year.

On a sequential basis, profits rose 17 per cent from Rs 418 crore during quarter ended June 30, 2011.

The net interest margin during the quarter under review, improved to 3.68 per cent (3.34 per cent) on account of operational efficiency, said its Chairman and Managing Director, Mr J.P. Dua.

Slippages rose by 15 per cent at Rs 520 crore (Rs 453 crore). “The slippages were up primarily on account of some small ticket loans in the micro, small enterprises and agricultural sectors,” Mr Dua said. However, there was no concern regarding asset quality so far and the bank was able to recover Rs 443 crore during the first half of the current fiscal, Mr Dua added.

The percentage of the bank's gross non-performing assets (NPA) to advances was flat at 1.77 per cent, while the percentage of its net NPAs to advances inched up marginally at 0.69 per cent (0.56 per cent).

Allahabad Bank scrip inched up by 8.05 per cent to close at Rs 161.05 on the BSE on Wednesday.

The bank does not have any immediate plan of hiking interest rates on savings bank account, Mr Dua said. “There is adequate liquidity in the system. We will, however, watch the market before taking a call on the issue. We might look at adding some innovative products in the savings bank basket.”

The capital adequacy ratio of the bank was at 12.99 per cent as on September 30, 2011. The bank has approached the Union Government for capital infusion to the tune of Rs 1,000 crore during the current fiscal. Allahabad Bank had received capital support to the extent of Rs 670 crore from the government last year.

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