LIC Housing Finance Q2 net soars 28% on higher interest income

Aided by a healthy growth in net interest income, LIC Housing Finance reported a 28 per cent increase in net profit at Rs 310 crore in the July-September period, against Rs 243 crore in the year ago period.

However, as compared to the April-June quarter, the growth in net profit was flat.

In the reporting quarter, India’s second largest standalone housing finance company logged a 28 per cent growth in net interest income (the difference between interest earned and expended) at Rs 453 crore (Rs 354 crore in the year ago period).

Net interest margin, which is the ratio of net interest income to average earning assets, improved to 2.22 per cent in the September 30quarter from 2.10 per cent in the year ago quarter.

During the quarter, LIC Housing disbursed individual loans and developer loans aggregating Rs 5,682 crore (Rs 5,717 crore) and Rs 265 crore (Rs 121 crore), respectively.

As on September-end, the company’s outstanding mortgage loan portfolio stood at Rs 83,216 crore against Rs 69,119 crore, registering a growth of 20 per cent.

Individual loan portfolio accounts for about 97 per cent of the outstanding mortgage loan portfolio.

Gross non-performing assets increased to 0.73 per cent of the gross advances against 0.60 per cent in the year ago period.

V.K. Sharma, MD and CEO, said “For the full year, we expect the loan book to grow at around 20 per cent, with some improvement in margins.”

On Wednesday, shares of LIC Housing Finance ended at Rs 219.20 per share on the BSE, up 5.59 per cent over the previous close.

Source: thehindubusinessline

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Bank of Maharashtra Q2 profit declines 72%

Pune-based Bank of Maharashtra posted a net profit of Rs 46.85 crore during the second quarter of the current fiscal against Rs 166 crore in the same quarter of last fiscal, a decline of 72 per cent year on year.

Total income stood at Rs 3,196 crore (Rs 2,434 crore), a growth of 31 per cent year on year.

Wholesale and corporate banking operations accounted for the maximum growth in the income as well as for a loss of Rs 46 crore (gross) impacting the bottom line adversely. In the same quarter of FY 13, this segment had shown profit of Rs 39 crore.

The bank’s gross NPAs rose to Rs 2,450.48 crore from Rs 1,292.45 crore. Net NPA stood at Rs 1,535.33 crore.

Source: thehindubusinessline

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IDBI Bank net profit drops 60% on higher bad loans, provisions

Higher bad loans and provisions dragged IDBI Bank’s net profit down by 60 per cent in the second quarter to Rs 192 crore from Rs 484 crore in the year-ago period.

Gross non-performing assets (NPAs) jumped to 4.98 per cent as of September-end, 2013, from 3.45 per cent in Q2FY’13. Net NPAs also rose to 2.82 per cent from 2.04 per cent, as per the BSE filing.

Provisioning of the public sector lender soared 78 per cent to Rs 879 crore from Rs 495 crore in the corresponding quarter last year.

However, net interest income, the difference between interest earned and expended, saw a 19 per cent increase at Rs 1,484 crore against Rs 1,249 crore in the same quarter last fiscal.

During the quarter, other income declined 15 per cent to Rs 579 crore compared with Rs 683 crore in Q2FY’13.

Year-on-year advances grew 10 per cent to Rs 1.84 lakh crore (Rs 1.66 lakh crore as on September 30, 2012), while total deposits increased 12 per cent to Rs 2.03 lakh crore (Rs 1.80 lakh crore).

The shares of IDBI Bank ended down by 3.1 per cent at Rs 65.60 per share on the BSE.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Monetary policy: RBI raises repo rate by 25 bps, holds cash reserve ratio

Along expected lines, the Reserve Bank of India Governor hiked the repo rate by 25 basis points in the October monetary policy review today.

The repo rate is now at 7.75 per cent. He had also raised it by 25 bps in the mid-quarter review in September.

Repo rate is the rate at which banks borrow short term funds from RBI.

Inflation has been on the upswing during the past few months. Wholesale price index (WPI) inflation touched 6.46 per cent in September while consumer price index inflation was at 9.84 per cent. Both these measures have been way beyond the comfort level of the RBI.

MSF rate cut by 25 bps

The Governor has also cut the marginal standing facility (MSF) rate by 25 bps to 8.75 per cent. The corridor between the repo rate and the MSF rate is now back to 100 bps signalling the return to normalcy in currency markets.

The MSF is an emergency window that banks borrow from when faced with a funds crunch.

Holds CRR

The RBI has kept cash reserve ratio (CRR) unchanged at 4.0 per cent of deposits and increased the liquidity provided through term repos of 7-day and 14-day tenor from 0.25 per cent of deposits of the banking system to 0.5 per cent with immediate effect.

The RBI said that with the more recent upturn of inflation, and elevated inflation expectations anticipating the pass-through of exchange rate depreciation and on going adjustment in administered fuel prices, it is important to break the spiral of rising price pressures to curb the erosion of financial savings and strengthen the foundations of growth.

Five pillars of building growth

The Reserve Bank also said that its developmental measures over the next few quarters will be built on five pillars. These are:

a. Clarifying and strengthening the monetary policy framework

b. Strengthening banking structure through new entry, branch expansion, encouraging new varieties of banks, and moving foreign banks into better regulated organisational forms.

c. Broadening and deepening financial markets and increasing their liquidity and resilience so that they can help absorb the risks entailed in financing India’s growth.

d. Expanding access to finance to small and medium enterprises, the unorganised sector, the poor, and remote and underserved areas of the country through measures to foster financial inclusion.

e.Improving the system’s ability to deal with corporate distress and financial institution distress by strengthening real and financial restructuring as well as debt recovery.

Source: thehindubusinessline

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Birla Sun Life names Pankaj Razdan as CEO/MD

Birla Sun Life Insurance (BSLI) has appointed Pankaj Razdan as Chief Executive Officer (CEO) and Managing Director (MD) of the company.

The appointment of Razdan, who has been with Aditya Birla Group since 2007, was subject to regulatory approval, the private insurer said in a release today.

“Razdan has successfully steered some of our key businesses through challenging times. He has also guided our AMC business to an industry leadership position,” Aditya Birla Group Chief Executive (Financial Services), Ajay Srinivasan said.

He replaces Jayant Dua, who will move to another role within the diversified group, the release said.

“With a strong foundation, trust of over 2.5 million customers and presence in over 550 cities, BSLI is well placed to harness the myriad opportunities that the Indian life insurance sector presents.

“I am confident that with the team, brand and infrastructure we have built over the years, we will be able to harness the opportunity the Indian insurance landscape presents,” Razdan said.

BSLI is a joint venture between India’s Aditya Birla Group and Sun Life Financial Inc, a top international financial services organisation from Canada.

Source: thehindubusinessline

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