1. ICICI Bank and HDFC on Thursday hiked home loan rates by a massive 0.75 percentage points, moving quickly to preserve margins in the wake of RBI raising key interest rates. The hike from the top two home loan providers is the second in the space of one month. ICICI Bank hiked the floating reference rate (FRR) for consumer loans, which also includes home loans, to 14.25 from 13.5 per cent, with effect from July 31. HDFC’s adjustable rate home loans will be priced at a minimum of 11.75 per cent with effect from August 1. Its fixed rate remains unchanged at 14 per cent per annum.A 0.75 percentage point hike will mean customers on floating rate home loans will have to pay an additional EMI of Rs 51 per lakh on a 20-year term.
2. The gross non-performing assets (NPAs) in retail loans are set to increase to around 4 per cent by March 2009, from 2.7 per cent on March 31, 2007, said a report by rating agency Crisil.
This is on a retail asset base of Rs 5-5.5 lakh crore across banks. The report, released on Thursday, said that the segments most affected by the decline in asset quality are unsecured segments such as personal loans and credit receivables, as well as two-wheeler, commercial vehicle and used car loans. Delinquencies have increased across the retail portfolios of banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs).
This is on a retail asset base of Rs 5-5.5 lakh crore across banks. The report, released on Thursday, said that the segments most affected by the decline in asset quality are unsecured segments such as personal loans and credit receivables, as well as two-wheeler, commercial vehicle and used car loans. Delinquencies have increased across the retail portfolios of banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs).
3. The rupee may have appreciated against the US dollar since July this year, but exporters are not taking forward cover, unlike in the past.The rupee has appreciated by about 2 per cent from Rs 43.21 on July 4 to Rs 42.49. Yet bankers said that most exporters remained reluctant to hedge their inward remittances. The reluctance to hedge was evident from the wide forward premia. Six month forward premium is currently at 6.10 per cent. During the corresponding period of last year, six month forward premium was 1.28 per cent, when exporters actually resorted to hedging their earnings.
4. Oriental Bank of Commerce has mopped up insurance premium worth Rs 2.51 crore in the first phase of insurance business in joint venture with HSBC Insurance Holdings Ltd and Canara Bank, according to Mr R. M. Sharma, General Manager of the bank in charge of eastern region. “Our target was to achieve Rs two crore worth premium and we have already exceeded it. This was made possible because of the co-operation of our field functionaries,” said Mr Sharma.According to Mr Sharma, the insurance joint venture would help boost the non-interest income of the bank. “This initiative should shore up our profitability and help increase our customer base to a great extent,” he said.
5.Federal Bank’s net profit increased by 1.81 per cent to Rs 68.15 crore for the quarter ended June 2008 compared to Rs 66.94 crore achieved during the corresponding quarter of the earlier fiscal.The marginal increase in net profit has been attributed to higher provisioning of Rs 131.79 crore towards depreciation on investments held in trading books.While the interest income increased 34.20 per cent to Rs 745.12 crore (Rs 555.22 crore), other incomes slipped 7.92 per cent to Rs 96.21 crore (Rs 104.48 crore). The operating profit was up 34.55 per cent to Rs 253.52 crore (Rs 188.43 crore).The growth in total income is said to be due to an increase in interest income in spite of a slip in trading income from securities and equity portfolios.
6. A month after increasing its PLR by 50 basis points to 16.5 per cent, YES Bank has taken the cue from the recent rate hike by the Reserve Bank of India to effect yet another hike of 50 bps from August 1. The PLR would now increase to 17 per cent.The bank has also proposed to increase the fixed deposit interest rate across varying tenors. Deposits maturing between 12 and 18 months would earn 25 bps more than the existing 9.75 per cent, and the rate of return for senior citizens has been revised to 10.5 per cent from August 1.Profit after tax increased 51 per cent to Rs 54.3 crore during the first quarter of the current fiscal compared to Rs 36 crore during the corresponding quarter of the earlier fiscal.
7. Central Bank of India has suffered a 39.6-per cent decline in its net profit to Rs 59.32 crore for the quarter ended June 30 from year-ago levels. The bank had netted a profit of Rs 98.35 crore during the first quarter of financial year 2008, it said in a filing to the Bombay Stock Exchange on Thursday. The total income rose 37.27 per cent to Rs 2,572.53 crore during the quarter from Rs 1,874.02 crore in the year-ago period. Income on investments was at Rs 611.8 crore and other income at Rs 161.2 crore as at the end of the June quarter. The capital adequacy ratio stood at 10.01 per cent.
8. The rising proportion of unsecured loans, increasing exposure to high-risk customers, spiralling interest rates and a decline in credit standards from 2004 to 2007 will result in more bad debt for the Indian banking sector, rating agency Crisil said today.
9. Riding on higher interest income, Punjab National Bank (PNB) on Wedesday reported a 20.6 per cent increase in net profit to Rs 512 crore during the first quarter of 2008-’09 compared with Rs 425 crore during the same quarter last year. The rise in profit was despite the bank taking a Rs 150-crore hit due to depreciation in the value of government securities.
10. The Manipal-headquartered Syndicate Bank, the 7th largest public sector lender (in terms of total business), today reported 60.18 per cent drop in its net profit at Rs 87.89 crore for the first quarter ended June 30, 2008 compared to the corresponding quarter last year.
