Dena Bank Q3 profit down 67 pct to Rs 67.80 cr on higher provisioning

Public sector lender Dena Bank reported a 67 per cent decline in net profit at Rs 67.80 crore for the quarter ended December 31 on account of higher provisioning.

The bank's profit after tax stood at Rs 206 crore in the corresponding quarter last year.

"Profitability is under stress due to higher provisioning," the bank's Chairman and Managing Director Ashwani Kumar told reporters here.

The bank's provisions increased to Rs 382.43 crore in the October-December quarter as against Rs 156.59 crore last year.

The bank's net interest margin (NIM) stood at 2.66 per cent in the quarter as against 2.88 per cent.

"We expect our NIM to be in the range of 2.75-3 per cent by March 2014," Kumar said.

Net Interest Income (NII) for the quarter was Rs 660.89 crore, a growth of 7.48 per cent, compared to Rs 614.90 crore in the same quarter last year.

The bank's asset quality deteriorated in the quarter with gross NPA increasing to 2.96 per cent from 2.09 per cent in the year ago quarter. Net NPA ratio rose to 2 per cent from 1.31 per cent in the same period last year.

In absolute terms, gross NPA has increased from Rs 1,317 crore to Rs 2,066 crore in the third quarter ended December 31, while net NPA increased from Rs 817 crore to Rs 1,379 crore.

Provision coverage ratio for the quarter was at 63.92 per cent. In the quarter under review, the bank's provisioning for non-performing assets was Rs 124 crore while for restructured assets it was Rs 53 crore, Kumar said.

The bank saw fresh slippages of Rs 503 crore during the quarter. One of the large accounts which became NPA was SEL worth Rs 99 crore, Kumar said.

The bank upgraded Rs 400 crore of bad loans in the quarter. The state-owned bank restructured Rs 552 crore of assets in the December quarter and has a pipeline of Rs 600 crore in the current quarter, Kumar said. Total business of the bank stood at Rs 1,65,976 crore as compared to Rs 1,47,922 crore.

While deposits of the bank increased to Rs 96,081 crore as on December 31 from Rs 84,882 crore last year, recording a growth of 13.19 per cent; advances increased to Rs 69,895 crore from Rs 63,041 crore, showing a growth of 10.87 per cent. Credit deposit ratio stood at 72.75 per cent.

The bank expects a credit growth of 17 per cent and deposit growth of 14-15 per cent by March-end.

Meanwhile, the public sector lender today launched a new term deposit 'Dena-444' with maturity of 444 days for retail customers, which will offer an interest rate of 9.15 per cent to general public and 9.65 per cent for senior citizens.


Source: Financial Express

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Andhra Bank proposes to raise Rs 800 cr in FY'15: CMD

State-owned Andhra Bank has proposed to raise Rs 800 crore during the next financial year to fund its growth plans, a top official said today.

"We are planning to raise (funds) through QIP (Qualified Institutional Placements) or from Government of India. We require about Rs 800 crore..," Andhra Bank Chairman and Managing Director C VR Rajendran told reporters here.

It would be decided by third quarter of 2014-15 financial year, he added.

"Right now the Government share holding is 60 per cent. Last year we got about Rs 200 crore. Initially we will approach the Government of India else we may go for QIP. We have found that going for an FPO is costly at this stage..," he said.

The proposal to raise funds is to achieve 20 per cent growth during the next financial year, he said.

Commenting about the third quarter results for the period ending December 31, 2013, Rajendran said the net profit of the bank declined by 82.1 per cent to Rs 46 crore due to higher provisioning on account of high NPAs.

Net profit for the quarter ending December 31, 2012 stood at Rs 257 crore.

For the nine month period ending December 31, 2013 its net profit declined by 63.1 per cent to Rs 348 crore from Rs 945 crore registered during the same period of last fiscal.

Total income of the bank for the third quarter ending December 31, 2013 rose by 12.5 per cent to Rs 3,901 crore from Rs 3,469 crore registered during the same period of previous year.
For the nine-month period, its total income increased by 13 per cent to Rs 11,572 crore, from Rs 10,241 crore during the same period of the previous fiscal.

Responding to a query about the gross NPAs of 5.45 per cent, one of the highest among public sector banks, Rajendran said the banks' NPA were predominantly in secured assets. "My bank NPAs represent good assets. That means secured. These are all because of the policy logjam by government," he said.

He said bad loans in power sector (11 per cent) and infrastructure projects (10 per cent) comprise major chunk of NPAs.

Elaborating, he said in Andhra Pradesh itself due to the issue of Telangana there was not much impact to the Bank. But, some of the power projects in Andhra Pradesh did not take off due to lack of coal and gas supply to power plant.

"The power plant has been completed. But they are not operating because of lack of coal and gas supply..," he said.

The bank will open another 120 branches before the end of the current financial year. "By next financial year we are planning to open 500 branches across the country..," he said.


Source: Economic Times

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ICICI-led Infradebt fund inks Rs 50 cr loan pact for road project promoted by Jaypee group

ICICI Bank-led India Infradebt Fund today signed a Rs 50-crore tripartite loan pact for a road project promoted by Jaypee group.

"Today the Infradebt company signed the first tripartite agreement. The agreement has been created in the road sector and paves the way for many more such road projects to have access funding through tripartite agreement. The funding would be to the tune of Rs 50 crore for this project," ICICI Bank Managing Director and CEO Chanda Kochhar told reporters here.

The tripartite agreement was signed today between the IDF, the NHAI (National Highways Authority of India) and the project company which in this case is the Himalayan Expressway Ltd (HEL).

HEL, a subsidiary of Jaypee group, is undertaking the construction of Zirakpur-Parwanoo Highway connecting Punjab, Haryana & Himachal Pradesh on Build Operate and Tranfer basis. The total length of the highway would be 28.690 kilometres.

Four financial institutions, led by ICICI Bank, had in February last year launched a Infrastructure Debt Fund (IDF) -- India Infradebt Ltd. This fund can finance projects of up to $ 2 billion (about Rs 10,000 crore).

The other sponsors of the India Infradebt Ltd are Bank of Baroda (BoB), Citi and LIC. The ICICI group has 31 per cent, BOB - 30 per cent, Citi - 29 per cent and LIC - 10 per cent.

"It is a tripartite agreement which then gives all the rights that the lenders have, it gives those rights to the IDF as well and then the IDF actually provides some part of the funding to the project company," Kochhar said.

She said there are almost 100 road projects in the country that are ready and would require about Rs 50,000 crore of bank funding. This agreement can pave the way for all such projects to access this kind of funding, she added.

Kochhar said similar pacts can be made for other infrastructure sectors, like ports, airports, besides PPP projects.

Concerned over poor infrastructure, the government had in 2011-12 fiscal allowed to form IDF to step up investment in the infrastructure sector, which requires $ 1 trillion in the 12th Plan.

Of the total proposed investment, about 50 per cent is expected to come from the private sector and the debt contribution is expected around $ 350 billion.


Source: Economic Times

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RuPay Card base to touch 25 mn by Mar: NCPI

The National Payment Corporation (NPCI) plans to almost double the number of RuPay Cards, the homegrown rival to Visa and MasterCard, to 25 million over the next two months.

"We have so far issued 14 million RuPay cards, and this will touch 25 million by the end of March," NPCI Managing Director and Chief Executive Abhay P Hota told PTI.

NPCI is the nodal agency under the Reserve Bank that manages the national payment switch and has developed the RuPay Cards.

RuPay Card, Reserve Bank and domestic lenders-promoted NPCI's answer to Visa and the MasterCards which control the domestic plastic money market, was launched in April 2012.

It has seen as many as 210 banks, including all public sector banks and some of the leading private sector ones, issuing these domestic debit cards, Hota said.

He agreed, however, that most of the RuPay customers are urban cooperative banks and regional rural banks.



Source: Economic Times

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Canara Bank to revamp units as fee income stagnates

Canara Bank is looking at revamping its subsidiaries to improve fee income and maximise the investments it has made in the units.

The government-owned bank, which has units engaged in businesses such as mutual funds, insurance and housing finance, has appointed consultant KPMG as advisor.

"The mandate to the consultant is to advise... on how the bank can improve its fee income with the help of subsidiaries," said RK Dubey, CMD of Canara Bank. "The consultant will also advise the bank on measures to improve returns on investments made in the subsidiaries."

Non-interest income, which captures fee income such as that earned by selling third-party products and giving guarantees, has remained stagnant for Canara Bank at Rs 851 crore in the December quarter compared with Rs 845 crore a year ago.


Source: Economic Times

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