Tides of 15.08.2015
1. Karur Vysya Bank, which will turn 100 in
July next, is looking to emerge as a strong SME bank. It wants to project the
bank as a niche player in the SME banking space and in tune with this vision of carving a niche for
itself as a “Specialised SME Bank”. KVB
has been developing products and packages designed for specific trades.“We have
worked out product packages for maximum number of business activities,
including supply chain finance. The package so devised will help various trades
operate without our intervention,” Mr.Venkatraman, MD & CEO said.
2. The stress in the banking sector may
require banks to raise up to Rs. 1 lakh crore
($15.7 billion) of capital over and above the Basel III requirement to manage
the risks from their loan exposure to debt-laden companies, according to India
Ratings and Research.Of that, public sector banks, which dominate India’s
banking sector with more than 70% market share, will need
Rs. 93,000 crs to deal with stressed loans. That may “significantly
increase” the Government’s equity injection requirements in Sstate-owned banks,
as against Rs. 70,000 crore already announced “We
expect private sector banks and large (State-run banks) to be better placed in
handling potential credit cost hikes from these large stressed corporates,
given their sufficient operating and capital buffers,” it said. The agency
analysed 30 large and most-exposed companies, each with individual debt of over Rs. 5,000 crore, aggregating to 7-8 % of the overall
bank credit.
3. Top 10 World Banks 2015 ranking
..........End of the global bank? The world’s
biggest banks continue to lose ground to Chinese rivals, according to The
Banker’s latest ranking of Top 1000 banks.This year HSBC – which has
restructured significantly and increased its focus on Asia – slipped from fifth
place to ninth. Citigroup – which has also curbed its overseas presence – fell
from sixth to seventh place. Royal Bank of Scotland (RBS) fell to 18th place
after the UK government bailout thwarted its international ambitions.Before the
financial crisis in 2008, HSBC topped the list, Citi placed second and RBS
third, measured by capital strength.Meanwhile, Chinese banks are powering ahead
in the ranking. China now has three banks in the top five places, with Bank of
China moving from seventh place to fourth, and China Construction Bank staying
in second place. Agricultural Bank of China moved up from ninth place to
sixth.The top four Chinese banks are also the world’s most profitable. Combined
profits from all Chinese banks in the ranking are almost double those of US
rivals and 10 times bigger than those of UK banks. In 2008, both UK and US
banks were more profitable than their Chinese counterparts.However, Chinese
banks are not taking as much global market share as their predecessors. ICBC,
which tops the ranking for the third year in a row, is aiming to have 10% of
its assets outside China in five years’ time. But this is small in comparison
with the global banks in their heyday.Brian Caplen, editor of The Banker, said:
“At one time the ambition of the largest banks was to have operations in all
parts of the world and across all business sectors. Now they are focussing on a
few areas in a bid to restore profitability. We may have seen the end of the
global bank.”While global banks are cutting back on employees – Citigroup has
reduced staff by 12% since 2011 and HSBC by nearly 8% with further losses to
come – China’s ICBC and in contrast China Construction Bank have each increased
staff by 13% over the same period. China’s big four banks now employ 1.6
million – 1.5 times more than the number employed by the big four US
