1. HDFC Bank plans to raise around Rs 4,200 crs from the equity markets ahead of the Basel-II guidelines. Given the bank's strong positioning in each of its major franchises (retail, corporate and treasury), it is important that it is adequately capitalised to support growth plans. The bank adds further incremental capital would also facilitate meeting the changing regulatory requirements such as the proposed capital adequacy framework (based on Basel-II accord) and the new capital market exposure norms.
2. British bank Barclays launched its retail operations in India, opening three branches, two of them in non-metro centres in the South, Kanchipuram in Tamil Nadu and Nelamangala near Bangalore. The third branch is in Mumbai. The bank had applied for branch licences across the country but was given these three for the time being.
3. RBI has allowed banks and primary dealers to use plain vanilla credit default swaps to buy and sell protection against credit defaults. The participants in the credit derivative market can be broadly divided into protection buyers and protection sellers. For now, only banks and PDs will offer these products. However, the apex bank will consider allowing insurance companies and mutual funds and when their respective regulators permit them to deal in credit default swaps. The RBI has said all parties should be Indian and the deals have to take place in rupees.
4. Centurion Bank of Punjab is still on the prowl for more mergers and acquisitions in its bid to aggressively grow in size. It is committed to acquisitions and mergers as a strategy for growth.The bank was awaiting the clearance of the RBI and the Kerala High court for completing the acquisition of the Lord Krishna Bank. This was likely to be completed by the end of the first quarter of this financial year. The bank had also sought approval from the RBI for private placement of 9.5 crs shares with Bank Muscat for raising Rs 250 crs.
5. To recover its dues, the Industrial Finance Corporation of India has advertised for sale of one of the units of Arihant Industries Ltd at Baddi, Himachal Pradesh. The reserve price for the unit is Rs 45 crs. The unit is located on about 28 acres of land and is eligible for tax concession from the central and state government.
6. The Cabinet will take up a proposal to allow public sector enterprises (PSEs) invest their surplus funds in mutual funds. With state-owned companies sitting on cash surpluses worth a whopping Rs 2 lakh crs, a Cabinet approval to the proposal will lend a big boost to the capital markets. Even a small percentage of this money entering equities indirectly through mutual funds will pep up the markets. Currently, PSEs are prohibited from parking excess cash in mutual funds. If the embargo is lifted, it will strengthen the mutual fund industry, too. The assets under management of mutual funds in India are worth over Rs 3.5 lakh crs now. PSEs’ surplus cash is expected to have crossed the Rs 2-lakh-crore mark this fiscal since the number of profit-making enterprises had gone up to 157 by the end of 2006, from 138 in 2004-05. The number of loss-making PSEs declined to 58 in 2005-06 from 79 in 2004-05. Several state-run oil firms are sitting on heavy cash surpluses.
7. Aditya Puri, CEO & MD of HDFC Bank, has said that the recent legislation allowing the RBI to do away with the floor on banks’ government securities investments would make his bank’s merger with its parent company, Housing Development Finance Corporation , a lot easier. Mr, Puri, when asked about a merger with HDFC, said, “We have never said no to a merger.” The view would get better, if the statutory liquidity ratio (SLR) was reduced from 25%.The SLR requirement for banks are currently at 25% of the net liabilities and lowering the base will help the merged entity maintain liquidity and carry on business as usual. At 25% SLR, any merged entity will have to borrow funds for reserve requirements. The other option will be to reduce lending or call funds back from borrowers to maintain the RBI’s mandatory reserve obligations.
8. Union Finance Minister P. Chidambaram assured the Rajya Sabha on Thursday that the Government would not make any effort to shed controlling stake in public sector banks (PSBs). He gave the assurance while piloting a bill that would allow State Bank of India to reduce its holding in seven subsidiary banks to 51 per cent. The Rajya Sabha later passed the State Bank of India (Subsidiary Bank Laws) Amendment Bill by a voice vote.
9. The four unlisted associates of the SBI propose to raise Rs 2000-3000 crs from the market in the calendar year with the Lok Sabha clearing the SBI Subsidiary Bank (Amendment) Bill. State Bank of Indore, State Bank of Patiala, State Bank of Hyderabad and State Bank of Saurastra are governed by three different acts.
10. Higher net interest income and lower provisioning have helped banks to post record net profit growth in the last five quarters. The PSU banks outperformed the private sector banks for the first time after a gap of five quarters on the back of robust net profit growth reported by SBI. The 30 public and private sector banks which declared their results for the quarter ended March 2007 have posted 37 per cent growth in net profit. This is the highest bottom line growth in the last five quarters. They had posted 42% rise in net profit in the December 2005 quarter. These 30 banks posted a combined net profit of Rs 6,428.47 crs in the March, 2007 quarter against Rs 4,704.64 crs in the quarter ended March 2006. Higher net interest income helped the banking sector to post higher net profit growth during the quarter. The total net interest income of the 30 banks increased by 26% to Rs 18,742.53 crs in the March, 2007 quarter against Rs 14,929.26 crs in the preceding quarter, while the provisioning and contingencies increased by 23% compared with 485. A 28% loan growth in the Indian banking sector in the year end March 2007, following a 35% average annual expansion in the previous two years benefited the banking sector. The banking sector has given loans to companies, individuals and farmers during the quarter. The twenty PSU banks have posted a combined 42% growth in net profit, compared with 22 per cent bottom line growth reported by the private sector banks. Twenty-one PSU banks recorded a combined net profit of Rs 4,878.43 crs in the March, 2007 quarter compared with Rs 3,437.34 crs in the corresponding quarter last year, while nine private sector banks posted a net profit of Rs 1,550 crs compared with Rs 1,267.30 crs.
11. With a business mix of about Rs 1.5 lakh crore, Union Bank of India has positioned itself as a national bank. For moving into the global league, the public sector bank would prefer merging with an equal-sized bank rather than going through the “pains” of acquiring small banks.
12. The government proposes to restructure the equity of Punjab and Sind bank for enabling it to access the capital market for raising funds.The government’s move follows the bank’s proposal to reduce the equity base which currently stands at Rs 743 crs. The bank has proposed to reduce the equity base to Rs 243 crore by converting the remaining equity of Rs 500 crore into preference shares. This will help the bank to launch a public issue and serve the shareholders better, since the equity base will be small.
13. The booming consumer finance space and the growing opportunities in corporate finance is forcing foreign banks to set shop in India. The Australian banks have a particular interest in India on the back of the growing trade relations between the two countries and corporate flows. After Macquire, the newest entrant is the Australian-based Westpac Institutional Bank. Westpac has opened a representative office in Mumbai after getting a license within three months. The bank has an alliance with Standard Chartered Bank (SCB), India.
2. British bank Barclays launched its retail operations in India, opening three branches, two of them in non-metro centres in the South, Kanchipuram in Tamil Nadu and Nelamangala near Bangalore. The third branch is in Mumbai. The bank had applied for branch licences across the country but was given these three for the time being.
3. RBI has allowed banks and primary dealers to use plain vanilla credit default swaps to buy and sell protection against credit defaults. The participants in the credit derivative market can be broadly divided into protection buyers and protection sellers. For now, only banks and PDs will offer these products. However, the apex bank will consider allowing insurance companies and mutual funds and when their respective regulators permit them to deal in credit default swaps. The RBI has said all parties should be Indian and the deals have to take place in rupees.
4. Centurion Bank of Punjab is still on the prowl for more mergers and acquisitions in its bid to aggressively grow in size. It is committed to acquisitions and mergers as a strategy for growth.The bank was awaiting the clearance of the RBI and the Kerala High court for completing the acquisition of the Lord Krishna Bank. This was likely to be completed by the end of the first quarter of this financial year. The bank had also sought approval from the RBI for private placement of 9.5 crs shares with Bank Muscat for raising Rs 250 crs.
5. To recover its dues, the Industrial Finance Corporation of India has advertised for sale of one of the units of Arihant Industries Ltd at Baddi, Himachal Pradesh. The reserve price for the unit is Rs 45 crs. The unit is located on about 28 acres of land and is eligible for tax concession from the central and state government.
6. The Cabinet will take up a proposal to allow public sector enterprises (PSEs) invest their surplus funds in mutual funds. With state-owned companies sitting on cash surpluses worth a whopping Rs 2 lakh crs, a Cabinet approval to the proposal will lend a big boost to the capital markets. Even a small percentage of this money entering equities indirectly through mutual funds will pep up the markets. Currently, PSEs are prohibited from parking excess cash in mutual funds. If the embargo is lifted, it will strengthen the mutual fund industry, too. The assets under management of mutual funds in India are worth over Rs 3.5 lakh crs now. PSEs’ surplus cash is expected to have crossed the Rs 2-lakh-crore mark this fiscal since the number of profit-making enterprises had gone up to 157 by the end of 2006, from 138 in 2004-05. The number of loss-making PSEs declined to 58 in 2005-06 from 79 in 2004-05. Several state-run oil firms are sitting on heavy cash surpluses.
7. Aditya Puri, CEO & MD of HDFC Bank, has said that the recent legislation allowing the RBI to do away with the floor on banks’ government securities investments would make his bank’s merger with its parent company, Housing Development Finance Corporation , a lot easier. Mr, Puri, when asked about a merger with HDFC, said, “We have never said no to a merger.” The view would get better, if the statutory liquidity ratio (SLR) was reduced from 25%.The SLR requirement for banks are currently at 25% of the net liabilities and lowering the base will help the merged entity maintain liquidity and carry on business as usual. At 25% SLR, any merged entity will have to borrow funds for reserve requirements. The other option will be to reduce lending or call funds back from borrowers to maintain the RBI’s mandatory reserve obligations.
8. Union Finance Minister P. Chidambaram assured the Rajya Sabha on Thursday that the Government would not make any effort to shed controlling stake in public sector banks (PSBs). He gave the assurance while piloting a bill that would allow State Bank of India to reduce its holding in seven subsidiary banks to 51 per cent. The Rajya Sabha later passed the State Bank of India (Subsidiary Bank Laws) Amendment Bill by a voice vote.
9. The four unlisted associates of the SBI propose to raise Rs 2000-3000 crs from the market in the calendar year with the Lok Sabha clearing the SBI Subsidiary Bank (Amendment) Bill. State Bank of Indore, State Bank of Patiala, State Bank of Hyderabad and State Bank of Saurastra are governed by three different acts.
10. Higher net interest income and lower provisioning have helped banks to post record net profit growth in the last five quarters. The PSU banks outperformed the private sector banks for the first time after a gap of five quarters on the back of robust net profit growth reported by SBI. The 30 public and private sector banks which declared their results for the quarter ended March 2007 have posted 37 per cent growth in net profit. This is the highest bottom line growth in the last five quarters. They had posted 42% rise in net profit in the December 2005 quarter. These 30 banks posted a combined net profit of Rs 6,428.47 crs in the March, 2007 quarter against Rs 4,704.64 crs in the quarter ended March 2006. Higher net interest income helped the banking sector to post higher net profit growth during the quarter. The total net interest income of the 30 banks increased by 26% to Rs 18,742.53 crs in the March, 2007 quarter against Rs 14,929.26 crs in the preceding quarter, while the provisioning and contingencies increased by 23% compared with 485. A 28% loan growth in the Indian banking sector in the year end March 2007, following a 35% average annual expansion in the previous two years benefited the banking sector. The banking sector has given loans to companies, individuals and farmers during the quarter. The twenty PSU banks have posted a combined 42% growth in net profit, compared with 22 per cent bottom line growth reported by the private sector banks. Twenty-one PSU banks recorded a combined net profit of Rs 4,878.43 crs in the March, 2007 quarter compared with Rs 3,437.34 crs in the corresponding quarter last year, while nine private sector banks posted a net profit of Rs 1,550 crs compared with Rs 1,267.30 crs.
11. With a business mix of about Rs 1.5 lakh crore, Union Bank of India has positioned itself as a national bank. For moving into the global league, the public sector bank would prefer merging with an equal-sized bank rather than going through the “pains” of acquiring small banks.
12. The government proposes to restructure the equity of Punjab and Sind bank for enabling it to access the capital market for raising funds.The government’s move follows the bank’s proposal to reduce the equity base which currently stands at Rs 743 crs. The bank has proposed to reduce the equity base to Rs 243 crore by converting the remaining equity of Rs 500 crore into preference shares. This will help the bank to launch a public issue and serve the shareholders better, since the equity base will be small.
13. The booming consumer finance space and the growing opportunities in corporate finance is forcing foreign banks to set shop in India. The Australian banks have a particular interest in India on the back of the growing trade relations between the two countries and corporate flows. After Macquire, the newest entrant is the Australian-based Westpac Institutional Bank. Westpac has opened a representative office in Mumbai after getting a license within three months. The bank has an alliance with Standard Chartered Bank (SCB), India.
