1. With the easing of yields and the likelihood of a further fall, there has been a flurry of Tier-II and perpetual debt issuances by banks to raise capital. Most banks will be required to enhance or add up capital as they are likely to expand 25-30 per cent this fiscal. Also, with the deadline of March 31, 2009 for implementation of Basel II norms approaching, banks are looking to maintain a cushion in their levels of capital adequacy, said analysts. As inflation and interest rates were higher in the first two quarters, there were not many bond issuances. Therefore, the December-January period is seeing hectic activity in the bond market as banks rush to raise capital to avoid bunching up of issues towards the end of the fiscal. Some banks that are likely to come out with bond issues in the near future include Bank of India, Canara Bank, State Bank of India, IDBI Bank, Union Bank of India, Corporation Bank, Allahabad Bank and Bank of Baroda.
2. South Indian Bank’s net profit for the quarter ended December 2008 increased by 33 per cent to Rs 54.20 crore against Rs 40.72 crore for the corresponding quarter of the previous fiscal.The bank is targeting a net profit of Rs 190 crore this fiscal. It has achieved Rs 144.50 crore in the first three quarters. Though credit growth has been less compared with the earlier years, it has grown by 13 per cent year-on-year, its Managing Director and CEO, Dr V.A. Joseph, said. Out of the aggregate business of Rs 27,779 crore as at December 2008, advances accounted for Rs 11,340 crore (against Rs 10,020 crore as at end December 2007).
3. Having achieved a national footprint and scale of operations, ING aims to double its market share in the country’s financial services sector. Towards this, the company has been carrying out a series of marketing activities, including a television commercial.Currently, the market share of each of ING’s three businesses in India (banking, asset management and insurance) is between 1 and 2 per cent. ING’s business footprint is across tier 1, 2 and 3 cities. While the life insurance business is present in 232 cities, the bank is present in 300 cities.
4. In a further setback to the Indian IT sector, the World Bank made public it has barred Wipro Technologies and Megasoft Ltd since 2007 from receiving direct contracts under its corporate procurement program. The Bank said Wipro’s offer of American depository shares (ADS) to its staff as part of public offering in 2000 was against its policy and it banned the vendor till 2011.
The Bank made public the names of debarred companies on January 11 under the new disclosure policy, stating the “change (in policy) was in the interest of fairness and transparency.” Analysts said the Bank’s move could have been prompted by the Satyam episode.It banned Megasoft Ltd for four years from December 2007 for participating in a joint venture with Bank staff while working with the Bank. Earlier, it put a ban on Satyam currently in the news for Rs 7,000 crore accounting fraud.
The Bank made public the names of debarred companies on January 11 under the new disclosure policy, stating the “change (in policy) was in the interest of fairness and transparency.” Analysts said the Bank’s move could have been prompted by the Satyam episode.It banned Megasoft Ltd for four years from December 2007 for participating in a joint venture with Bank staff while working with the Bank. Earlier, it put a ban on Satyam currently in the news for Rs 7,000 crore accounting fraud.
5. If you have a health insurance policy with a cover below Rs 1 lakh, you may soon be able to enjoy portability of your policy from one insurance provider to another. The General Insurance Council (GIC), in a crucial meeting held recently, favoured the portability for policies below Rs 1 lakh and formal guidelines to this effect would be sent to the Insurance Regulatory and Development Authority (IRDA) soon, Mr M. Ramadoss, Chairman, Oriental Insurance Company and member of GIC, told Business Line. Under present norms, a policy holder is given health cover for a year which has to be renewed every year. If there is no claim, the policy-holder is entitled to a bonus in the form of an increased sum. In addition, the bonus gets accumulated for every claim-free year.
6. With the rate of inflation declining steadily in recent weeks to touch a 10-month low of 5.91 per cent (week ended December 27), there is possibly a smug feeling in New Delhi that the price situation is fully under control. The fact is it is not. International prices of an array of commodities have no doubt declined in the last four months. While global growth concerns have weakened the demand side, drying up of liquidity, rising inventories and exit of speculative capital have contributed to the poor price sentiment. Producers have promptly responded with output cuts — OPEC has cut crude output by as much as 4 million barrels a day. There is reason to believe that supply is declining faster than demand as a high rate of compliance on part of OPEC and continued disappointing non-OPEC production are more than offsetting demand weakness.
7. German Chancellor Angela Merkel's government is to hammer out a major new stimulus package this week for Europe's biggest economy but her fractious coalition is still divided on the details.
8. The government is looking at a plan to inject public funds into 40 or more regional banks, whose capital bases are being hurt by rising bad loans amid the financial crisis, the Mainichi newspaper reported on Wednesday.
9. ICICI Bank that pioneered 12-hour banking (8 am to 8 pm) in the country, is gradually cutting down its business hours in branches. After cutting down business hours at many of its branches by 3 hours from December, the bank has now decided to cut down business hours at all its branches on Saturdays. The second largest bank has decided to cut business hours at its branches on Saturdays to 5 hours, from 9 am to 2 pm.Decision to cut business hours on Saturdays will be effective from February 7, the bank said on its website.
10. Bankers to Maytas Infrastructure and Maytas Properties are reviewing their exposure to both the companies in view of the rise in risk. The fear is that project delays could result in guarantees being revoked.With growing controversies around the Ramalinga Raju family-promoted entities, banks will play safe”, said a top official of a public sector bank.State Bank of India, which has an exposure of less than Rs 500 crore, is reviewing all these accounts and sharing information with both the central government and the Reserve Bank of India to see if there is a need to take proactive action, SBI Chairman O P Bhatt said on the sidelines of 'Vibrant Gujarat’ in Ahmedabad On Monday.Bhatt, however,said there is no problem with the Maytas accounts and the entire exposure is collateralized. “No personal loans have been given to Raju and his sons,”.he said.Confirming the review of exposures, ICICI Bank said in a statement, “We are a banker to the company and are reviewing our exposure.” It, however, did not elaborate on the kind and the extent of its exposure.“We cannot comment on individual lending exposures. We will issue any disclosures if and when we assess that there is an impact that requires such disclosure”, India’s second largest lender said.
