HSBC focused towards making more cost savings by 2016

Asia-focused bank HSBC announced that it will make another $2-3 billion of new cost savings by 2016, extending its restructuring plans.

The lender said in a statement that it will seek the additional sustainable cost savings on top of its wide-ranging restructuring process that was launched in 2011.

HSBC revealed last week that it had slashed a total of $4.0 billion from its annual costs, axing about 46,000 jobs since 2011 as part of a vast restructuring.

“We have transformed HSBC in the first phase of the execution of our strategy,” said chief executive Stuart Gulliver in today’s strategy update.

“We have announced the closure or disposal of 52 non-strategic or underperforming businesses, achieved $4.0 billion of annualised sustainable cost savings and generated double-digit loan growth in 15 priority markets.

“HSBC is now simpler, easier to manage and ready to take advantage of growth opportunities.”

HSBC announced last week that first-quarter net profits more than doubled to $6.35 billion, aided by sliding bad debts, deep cost cutting and a solid performance in Britain and Hong Kong.

Last year, however, HSBC had posted a 16.5-percent slump in net profits as it was hit by US money-laundering fines, mis-selling scandals, rising taxation and a vast accounting charge.

Source: thehindubusinessline

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Jammu & Kashmir Bank Q4 net profit up 20% at Rs 250 cr

Jammu & Kashmir Bank registered 20 per cent rise in net profit at Rs 250 crore for its fourth quarter ended March 31, 2013.

The bank had recorded a profit of Rs 208.1 crore in the same period of the previous fiscal, Jammu & Kashmir Bank said in a filing to the BSE.

Total income of the bank rose to Rs 1,835.71 crore in January-March quarter as compared to Rs 1,479.81 crore in the same period during the previous fiscal.

The bank proposed a dividend of 500 per cent, or Rs 50, per share for 2012-2013.

For the entire fiscal, the bank’s net profit increased by 31 per cent at Rs 1,055.10 crore, compared to Rs 803.25 crore in 2011-12.

Total income increased to Rs 6,620.53 crore during the year, compared to Rs 5,169.70 crore in the previous fiscal.

Gross non-performing assets (NPAs), as a proportion of advances, rose to 1.62 per cent at the end of March 2013, as against 1.54 per cent in the previous fiscal. However, net NPAs declined 0.14 per cent during the year from 0.15 per cent at the end of March 2012.

Source: thehindubusinessline

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Karnataka Bank net up 41.4% in FY13 as recoveries improve

Despite a 18.96 per cent decline in net profit during the fourth quarter, Karnataka Bank’s profit in fiscal 2012-13 grew 41.45 per cent.

The bank recorded a net profit of Rs 67.39 crore in the fourth quarter of 2012-13 against Rs 83.16 crore in the year-ago period.

P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, attributed the decline to higher provisioning in the fourth quarter.

The provision coverage ratio has gone up from 47.18 per cent to 55.36 per cent, he said.

The provision for income-tax came to around Rs 31 crore (Rs 23 crore). With this, the total provision went up to Rs 86 crore, he said.

FY13 performance

However, the bank posted a net profit of Rs 348.08 crore in 2012-13 as against Rs 246.07 crore in the previous year, a growth of 41.45 per cent.

Terming this net profit as an all-time high, Bhat attributed it to the growth in advances and good recovery in NPAs (non-performing assets).

“We could reduce the NPAs. We made a total recovery of around Rs 459 crore during the year.

“Of that, we sold assets worth around Rs 100 crore to asset reconstruction companies, and made real recoveries of around Rs 175 crore,” he said, adding that accounts of Rs 75 crore were upgraded and gross NPAs were brought down from Rs 684 crore to Rs 634 crore. Bhat said the bank wants to reduce the gross NPAs to around 2 per cent and net NPAs to below 1 per cent during 2013-14. The bank has set a business growth target of 28 per cent during the current fiscal.

DIVIDEND

The board of directors has recommended a dividend of 40 per cent.

This works out to Rs 4 per equity share. On Wednesday, the Karnataka Bank scrip closed at Rs 159.95 on the BSE, up 2.99 per cent over the previous close of Rs 155.30

vinayak.aj@thehindu.co.in

Source: thehindubusinessline

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Bank of Baroda Q4 net down 32% as NPAs rise

Bank of Baroda’s fourth-quarter net profit dropped by about a third as it set aside more money to cover potential loan losses.

For the January-March quarter, the public sector bank’s net profit decreased to Rs 1,029 crore from Rs 1,519 crore, a year ago.

The bank set aside Rs 1,598 crore to cover potential loan losses in the quarter, up from Rs 844 crore it set aside in the same period last year.

Slippages during the reporting quarter increased 79 per cent to Rs 7,983 crore from Rs 4,465 crore in the corresponding quarter last year.

BAD DEBTS

The rise in non-performing assets (NPAs) in the quarter was due to poor performance of the bank’s overseas portfolio from where the bank gets about 29 per cent of its total business. The bank’s overseas NPA increased to Rs 880 crore in the quarter ended March from Rs 225 crore, a year ago.

“Domestic NPAs will stabilise around the current levels for the next two quarters, after which it will improve,” S. S. Mundra, Chairman and Managing Director, said.

Slightly over 50 per cent of the new slippages during the quarter came from the corporate loan portfolio, reflecting prolonged industrial slowdown.

The bank said it wrote off loans worth Rs 1,200 crore in the quarter.

The bank restructured loans worth Rs 2,843 crore in the quarter ended March 31,2013, compared with Rs 5,280 crore in the same period last year, Mundra said.

Mundra said that the bank’s deposit and credit growth will be about two per cent more than the industry average.

The RBI, in its annual policy on May 3, said it expects deposits of scheduled commercial banks to grow at 14 per cent and credit growth at 15 per cent in the FY’2014.

The bank’s board has recommended a dividend of Rs 21.50 per equity share. The bank’s peers in the public sector also saw a decline in quarterly net profit due to higher provisions. Punjab National Bank’s Q4 net dropped 21 per cent, while Canara Bank’s Q4 net dropped 12.5 per cent. India’s largest lender, State Bank of India, will declare its quarterly and annual results on May 22.

Shares of the bank closed at Rs 691.85, down 1.82 per cent, on the Bombay Stock Exchange.

satyanarayan.iyer@thehindu.co.in

Source: thehindubusinessline

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BoI net drops 21% as bad loan provisioning doubles

Higher provisioning and lower margins weighed on Bank of India’s profitability in the fourth quarter ended March 31, 2013.

The public sector bank’s net profit fell 21 per cent in the reporting period to Rs 757 crore. The decline in profit came despite a prudential write-back of Rs 192 crore on account of taxation.

Net interest income (difference between interest earned and expended) declined marginally to Rs 2,476 crore.

Provisions towards bad loans more than doubled to Rs 1,089 crore during the quarter.

Net interest margin fell to 2.46 per cent. “The bank expects NIM to improve to about 3.10 per cent on the back of lower cost of deposits and improvement in international margins to about 1.20 per cent,” said Vijayalakshmi R. Iyer, Chairperson and Managing Director.

Net profit for FY13 nudged up three per cent to Rs 2,749 crore against Rs 2,677 crore in FY12.

Gross non-performing assets ratio increased to 2.99 per cent from 2.34 per cent in March quarter of FY12. For Bank of India, NPA levels have peaked, said Iyer.

Loan restructuring

The bank restructured loans worth Rs 2,159 crore in Q4 FY13. “Restructuring in the June quarter this fiscal is expected to be about Rs 515 crore. Going forward, stress in the loan portfolio will be lower,” Iyer said.

Against an exposure of Rs 650 crore to the beleaguered Kingfisher Airline, the bank has recovered Rs 53 crore through share sale in the recovery process.

Further, the bank will go for qualified institutional placement in the second half of FY14. “We will require capital worth about Rs 6,000 crore, of which, Rs 3,000 crore will be ploughed back from profits. Hence, about Rs 3,000 crore will be raised, including capital infusion from the Government,” Iyer added.

The board recommended a dividend of Rs 10 per share in FY13.

Bank of India’s scrip ended 4.35 per cent lower at Rs 324.25 per share on Bombay Stock Exchange.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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