SBI Q2 net rises 30% to Rs. 3,100 cr

India’s largest bank, State Bank of India posted a 30 per cent rise in net profit at Rs. 3,100 crore for September 2014 quarter as against Rs. 2,375 crore in the same quarter a yea ago. Sequentially, however, the profit declined from Rs. 3,349 crore in the June quarter.

Net interest income (difference between interest earned and expended) was up 8 per cent at Rs. 13,274 crore from Rs. 12,251 crore, in the corresponding quarter last fiscal.

During the quarter, provisioning for bad loans jumped to Rs. 4,275 crore signalling pressure on asset quality. In September 2013, the bank provided for Rs. 3,029 crore.

Gross NPAs for the quarter improved to 4.89 per cent as on September end 2014 from 5.64 per cent as on September end 2013. Further, net NPAs in September 2014 improved to 2.73 per cent from 2.91 per cent in September 2013.

Bank’s recovery efforts helped the bank gets more upgrades and recoveries at Rs. 2,635 crore during the quarter as against Rs. 1,362 crore in the previous quarter.

The bank’s NIM (net interest margin) declined to 3.49 per cent as compared to 3.54 a year ago. However, international NIM improved from 1.08 per cent to 1.20 per cent.

At day's close, SBI shares ended at Rs. 2,788.45 per share, higher by 2.55 per cent over its previous close on BSE.

Source : The Hindu

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FIPB clears HDFC Bank’s proposal to hike foreign holding to 74%

The FIPB today cleared the long-pending proposal of HDFC Bank to hike foreign holding in the bank to 74 per cent.

“FIPB today considered and approved HDFC Bank’s proposal to raise foreign investment ceiling to 74 per cent,” officials said after the meeting of the Foreign Investment Promotion Board.

The FIPB is of the view that HDFC Bank’ parent HDFC Ltd’s 22 per cent holding in the bank is FDI and hence total foreign holding is 73.39 per cent, which includes FII, FDI, ADR and GDR.

“So the bank has little headroom to raise funds from foreign investors,” the official said.

Late last year, HDFC Bank had approached the FIPB for increasing the foreign holding in the bank to 67.55 per cent from 49 per cent.

However, the proposal was not cleared by the FIPB as the Finance and Industry ministry was of the view that the parent HDFC Ltd’s 22 per cent holding in the bank is FDI.

Taking into consideration the 22 per cent parent holding as FDI, the total foreign holding was more than 67.55 per cent when they approached the FIPB for the first time.

Following clarification sought by FIPB earlier this year HDFC Bank sent a revised proposal raising its foreign holding ceiling request to 74 per cent, from its earlier proposal of 67.55 per cent.

Further, the proposal of pharma company Sanofi was cleared by FIPB in today’s meeting along with Punj Llyod’s proposal to enter into defence space.

Source : The Hindu

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SBI indicates capital raising plans

The country’s largest bank State Bank of India plans to raise capital during the current financial year and in the next year.

While the size of the capital to be raised has not been disclosed, the issue would be linked to the extent to which the Central Government would be ready to dilute its holding in the bank which at present stands at 58.60 per cent.

In a communication to the stock exchanges, the bank said that its board of directors today approved the issue of equity shares of Rs 10 each (post-split Rs 1 each) "such amounts as will dilute the Gol shareholding" to the level approved by it (Gol). The amount would be raised from the market or the GoI by way of preferential issue/QIP/FPO/rights issue/GDR/ADR and/or any other mode(s) or a combination(s) thereof as may be cleared by the Gol and RBI. The number of equity shares to be issued would be decided by the Committee of Directors for Capital Raising and the fund raising would be done during FY15 and FY16, the statement from SBI said.

According the BSE data, the promoters (read GoI) hold 58.60 per cent stake in the bank. While FIIs hold 11.18 per cent share in its equity, DIIs hold 20.07 per cent stake and others hold 10.15 per cent share in the bank’s equity as at the end of Sept 2014. Shares of the bank are up by Rs 64.80 to Rs 2783.95 on the BSE minutes before the market is to close.

The board also authorised the Committee of Directors for Capital Raising to decide on number of tranches and the timing of issue(s) and the size of the issue for raising additional Non-Equity capital by way of AT-1 and/or Tier II bonds in US currency/ Indian rupee considered as regulatory capital under Basel III guidelines, to be issued to Indian and/or overseas investors, in one or more tranches, during FY15 and FY16 through public offer and/or private placement.


Source : The Hindu

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80% of households have at least one bank account

A survey by banks has found that 80 per cent of households have at least one bank account. This shows improvement over census 2011 data which said nearly 6 out of 10 households have access to banking service.

This happened mainly due to Pradhan Mantri Jan Dhan Yojana (PMJDY) which was reviewed by newly appointed Financial Service Secretary Hasmukh Adhia this week. The meeting reported that 83 per cent of a survey to identify unbanked households has been competed. As per the initial results, on an average about 80 per cent of the households surveyed have now got at least one bank account. Now banks have been asked to complete the remaining work by November 30.

Census 2011 estimated that out of 24.67 crore households in the country, 14.48 crore (58.69%) households had access to banking services. After launch of PMJDY, banks were asked to conduct survey for identification of uncovered households.

The meeting was attended by State Level Banking Committees (SLBC) Conveners of all the States. It was reported that Kerala became the first state on November 11 to have all the households in the state with at least one bank account. In addition, Goa, Union Territories of Chandigarh, Puducherry and Lakshadweep and three districts of Gujarat – Porbandar, Mehasana, Gandhi Nagar, have also covered all households under PMJDY with at least one bank account.

Latest data revealed that a total of 7.24 crore bank accounts have been opened under the scheme. These comprise 4.29 crore in rural area and 2.95 crore are in urban areas. RuPay Cards have been issued in case of 3.97 crore accounts. The scheme has a target of opening 7.5 crore bank account by January 26 next year, but it appears the target will be achieved at least two months in advance. The Finance Minister Arun Jaitley has already said that target will be revised to 10 crore.

Department of Financial Services is regularly emphasising the early issuance of RuPay Debit Cards, e-KYC based account opening, seeding of Aadhaar, Financial Literacy and the progress in Survey made.

In order to record the appreciation of banks, the Government has framed a scheme of rewards for the bankers. This has already been communicated to them, a statement issued by the Finance Ministry said. Now banks have been asked to be in preparedness for modified Direct Benefit Transfer for kitchen fuel LPG proposed to be launched on November 15 in 54 districts and from January 1 in remaining parts of the country.


Source : The Hindu

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Final norms on small banks by month-end: Raghuram Rajan

The Reserve Bank of India's proposed final guidelines on starting payment banks - meant to serve smaller businesses and lower income households - are likely by the end of the month, central bank governor Raghuram Rajan said on Thursday.

Rajan, during a speech in Mumbai, said the final proposal for establishing payment banks was with the finance ministry for feedback, and said he expected to call for applications for potential payments banks by the end of the month.

In July the central bank had issued draft guidelines on payment banks, which are meant to target the needs of under-banked segments such as small businesses, low income households, and farmers.


Source : The Hindu

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