Tides of 24.07.2015

1.  At a time when banks are coping with increasing bad loans, asset reconstruction companies (ARCs) need more regulatory leeway to raise foreign and alternative investment funding to buy loans, said Asset Reconstruction Company India (Arcil) chief Vinayak Bahuguna. The capacity of capital constrained ARCs to buy stressed assets from financial institutions has dropped due to declining return on equity. “For the last 13 years, the average return on equity for ARCs has been below 6 per cent. This is proof enough… Asset pricing is one of the important factors. Many auctions (of bad assets on sale) go unattended,” said Bahuguna, the new CEO and MD of Arcil, the oldest ARC in the country.

2.  Muthoottu Mini Financiers, a leading non-banking finance company, has announced the launch of an non-convertible debentures, with face value of Rs. 1,000 each, aggregating to Rs. 125 crs. Roy M Mathew, the company’s Chairman, said Rs. 250 crs is likely to be collected altogether, as an additional Rs. 125 crs can be mopped up under the greenshoe option.The company’s fifth NCD issue is rated BBB- (pronounced Triple B minus) by CARE. The NCDs offer yields up to 12.25%. There are several tenor options, starting from 500 days to 72 months. Interest will be paid on annual or monthly basis. A cumulative payout can also be opted for where the interest is paid at maturity. The minimum investment amount is Rs. 10,000 (10 units). The income from NCDs held in demat format will not be taxed at source.The NCDs will also be made available at all of Muthoottu Mini’s 1,000+ branches. The public issue will close on August 14.

3.  Lakshmi Vilas Bank reported a 43 per cent increase in net profit to Rs. 40 crs for the quarter ended June 30, 2015, as against Rs. 28 crs in the same quarter last year. “There was an improvement across all efficiency parameters,” said the bank’s Managing Director and CEO Rakesh Sharma. The bank plans to raise nearly Rs. 350 crore by way of qualified institutional placement or other sources by September, he told newspersons.Highlighting the bank’s first quarter performance, Sharma said total business increased 21 per cent to Rs. 38,802 crs ( Rs. 32,181 crore). Total deposits stood at Rs. 22,239 crs ( Rs. 18,758 crs). The net non-performing assets (NPAs) as on June 30, 2015, stood at 1.72% as against 3.19% in the same quarter last year, he said.“We have improved our performance across all sectors since June 2014. We hope to continue this momentum going forward this year,” he said. The bank has nearly 2.7 million customers and 400 branches in 16 States and one Union Territory. The RBI has given its approval to the bank to add another 60 branches this year. Of this, 45 will be in the South.

4.  The Board of Catholic Syrian Bank has appointed Anand Krishnamurthy as the MD & CEO, pursuant to RBI approval. Prior to this, Krishnamurthy worked with HSBC for 22 years.  S Santhanakrishnan is currently the part-time Chairman of the bank. Catholic Syrian Bank is an over 94-year-old bank with a strong base in Kerala along with significant presence in Tamil Nadu, Karnataka and Maharashtra.