Tides of 10.04.2007

1. Hyundai Motor is expected to bring its instalment auto-financing unit Hyundai Capital Services Inc to India to service its expanding customer base. Hyundai's other financial arm is Hyundai Card, a credit card unit. In South Korea, Hyundai Capital Services owns over 60% of the market share of the domestic auto finance business.

2. Standard Chartered Bank, which is eyeing a stake in UTI Securities, will go ahead with its proposal to establish a presence in the securities broking space even if its plan does not work out. The bank, which is said to be in the race for UTI Securities along with several others, hopes to get its hands on the broking firm, which is at the moment controlled by Securities Trading Corporation of India (STCI). Citi, which also has a strong presence in the banking sector, is believed to be one of the players eyeing UTI Securities. STCI had last year taken over UTI Securities for Rs 265 crore from Specific Undertaking of Unit Trust of India.

3. Standard Chartered Bank has decided to launch private banking services in India as part of its plan to tap wealthy customers in a better manner. The banking group, which offers such services in some of its key markets, including Hong Kong, Singapore and Korea, feels private banking will help consolidate its presence in a country that currently contributes well over 12% of its overall revenues.

4. Standard Chartered Bank expects the final transfer of its asset management business to UBS to take place shortly. A remittance of about $120 mn, which will be reflected in this year's balance sheet, is expected to come in by way of the transfer.

5. Acer and ICICI Bank are now providing financing options for the purchase of IT solutions by the SMB (small and medium business), SME (small and medium enterprise) and education sectors. The Acer-ICICI financing option offers special loans, from Rs 30,000 onwards, for all office equipment at attractive interest rates. This tie-up facilitates easy buying and easy processing options, to help increase PC penetration in the SMB & SME sectors.

6. 2006 was a record breaking year for the auto industry. The industry posted its highest-ever sales of 1.3 mn vehicle units with a 24% year-on-year sales growth rate. Will the current fiscal see a repeat? No tax soaps were announced in the Budget 2007-08. No news for the auto industry was as good as bad or no good news as there were expectations from the Finance Ministry to push the current growth rate. Now comes higher interest rates with auto loans priced by banks at 15.5 % against 14.5%. Sales growth could drop to 12 % from 24%last year. Though corporates and high net worth individuals would not stall their purchases, it is the individual whose purchase decision may be deferred by a couple of months.

7. Oriental Bank of Commerce may raise up to Rs 500 crs capital during the first quarter of the current fiscal . This would be Tier-II capital. There is headroom for us to raise Tier-II capital. It will most likely tap the market with lower Tier-II bonds at an appropriate time. It has already obtained AAA rating from ICRA and CARE for the lower Tier-II bond offering, which is likely to be done on a private placement basis.

8. ABN Amro Bank is training NGOs to make the transition to micro-finance institutions (MFIs). It is focusing on micro-finance enterprise development in India. It is building the capacity of seven MFIs spread over Assam, Bihar and Uttar Pradesh. It hopes to build capacities of around 50 start-up MFIs over the next three years. Since 75% of the micro-finance activity is concentrated in four southern States, the bank is looking at the north and northeastern States to develop this programme.

9. HSBC is awaiting Government and RBI nod to expand its footprint in India through more branches and ATMs. It has 47 branches and about 160 ATMs in 26 cities and has applied for about 30 new branches and some 50 ATMs across the country, with a good chunk of them in the South India.

10. Centurion Bank of Punjab has hiked its prime lending rates by 50 bps to 15% pa, effective April 10. IOB has also hiked its PLR.

11. SIDBI has registered 80%growth in credit disbursement in Kerala in the last fiscal as it disbursed Rs 750 crs for the SME sector in the State against the Rs 479 crs in the previous fiscal.