Federal Bank Q1 net profit increses 115%
Kochi: The net profit of the Aluva-based Federal Bank rose by 115 per cent to touch Rs 37.43 crore for the quarter ending 30 June 2003, as against the Rs 17.47 crore recorded during the corresponding quarter of the previous year. While the total income of the bank grew by 19.78 per cent to Rs 365.86 crore (Rs 305.45 crore), the total expenses grew by just 2.45 per cent to 254.71 crore (Rs 248.13 crore). This enabled the bank's operating profit to grow by 94 per cent to Rs 111.65 crore (Rs 57.32 crore), a fax from the bank has said.

The bank's total income from advances in the first quarter increased by 5.82 per cent to 175.62 crore (Rs 165.87 crore). The bank's total deposits grew by 20.74 per cent to Rs 10,960 crore, while the total advances grew by 27.15 per cent to Rs 6,267 crore. As per the prudent policy of the bank, it has made additional provisions for NPAs over and above those stipulated by the RBI norms. Net NPAs have fallen from Rs 307.81 crore as on March 2003 to Rs 280.04 crore, thus bringing down the net NPA to advances to 4.47 per cent from 4.95 per cent. With the net worth of the bank growing to Rs 567 crore, the book value per shares has increased from Rs 243.77 to Rs 261.
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ICICI Bank gets RBI nod to start offshore unit
Mumbai: ICICI Bank has announced that it has received approval from the Reserve Bank of India to start an offshore unit. The new offshore banking unit (OBU) will be located in the Special Economic Zone, Mumbai, with the capital base capped at the minimum requirement of $10 million. Bhargav Dasgupta, head, international banking, ICICI Bank, says: "We will be focussing on lending to exporters and also on more flexible liability products for both our retail as well as corporate customers through the OBU." The bank plans to set up the unit by September. "Since OBUs enjoy certain privileges we will be able to give competitive rates to our customers on the asset side," he added.

OBUs do not have to fulfil the statutory norms of cash reserve ratio and statutory liquidity ratio requirements. They are also exempt from meeting priority sector lending norms set by the regulator. SBI is reportedly planning to transfer the bulk of its India-related business from its offshore units in Mauritius, Tokyo, Nassau and Bahrain to the new OBU, while ICICI Bank has no overseas branches at present to replicate the same. The private bank is expected to start branches in Singapore, the UK and Canada shortly. At the moment the private bank only has representative offices abroad.
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Canara Bank capital restructuring this year-end
Bangalore: Canara Bank's capital restructuring will be considered only towards the end of this year, according to R V Shastri, chairman and managing director of the bank. Shastri said the bank's lock-in period will be completed only by the end of the year, after it made its maiden public issue last November. He said the bank however has an adequate capital adequacy ratio of about 12.5 per cent. This is despite returning Rs 278 crore of the capital back to the government. The bank's gross business is targeted to grow by 15.5 per cent this year to about Rs 1,31,000 crore, comprising Rs 82,000 crore and Rs 49,000 crore of advances. But the focus, Shastri said, will be on retail advances. Retail advances growth is targeted at 35 per cent of the incremental advances, he said. The bank will also launch its debit card and its mobile banking services during the current year, he added.
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FM sets 9% interest on crop loans by banks
New Delhi: Finance Minister Jaswant Singh has said that crop loans of up to Rs 50,000 made by public sector banks will henceforth attract a maximum annual interest rate of 9 per cent. "This single digit rate will benefit most crop loan account holders, while covering almost all small and marginal farmers." He denied that the move signalled a return to the pre-October 1994 controlled interest rate regime.

"There is no question of re-introducing administered interest rates either through the backdoor, front door or side entrance. Today's decision has been taken after detailed discussions involving not only the Reserve Bank of India, but also bankers and the Indian Banks Association (IBA). There has been a general concern that the benefits of declining interest rates have so far not percolated to the farmer and he continues to borrow at 16-17 per cent," he said. Ministry officials clarified that the 9 per cent maximum lending rate would benefit even those farmers, whose loan size exceed Rs 50,000.
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Vijaya Bank equity offering slated for September
Coimbatore: The Rs 100-crore proposed equity offering of Vijaya Bank will be on in September 2003. The bank is yet to finalise the date and the premium at which the share would be offered, according to P A Sethi, executive director, Vijaya Bank. The board, as reported earlier, had resolved to issue equity shares to the public for an aggregate value of Rs 100 crore, to meet the needs of increasing business volumes and for meeting the capital adequacy requirements of the bank.

Sethi said that the matter was before the lead managers to the issue. `We are yet to finalise the date of the offer and the premium. We are planning to make the offer in September', he said. The issued, subscribed and paid-up capital of the bank stands at Rs 333.51 crore. The Government's holding is 70.02 per cent, amounting to Rs 233.51 crore, while the public holding is 29.98 per cent (Rs 100 crore).
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SBM, Maruti in alliance for car loans
Bangalore: Maruti Udyog (MUL) and State Bank of Mysore have announced a tie-up to offer car loans, which will also help the former to tap the rural and semi-urban markets. MUL managing director Jagdish Khattar told a news conference that even though the company has tie ups with private car finance companies, similar deals with public sector banks with larger network will help Maruti to penetrate into rural and semi-urban markets.

He said currently car financing is confined to around 60 cities. Maruti already has a tie-up with State Bank of India. It plans to tie-up with all the associate banks of SBI soon. But Khattar ruled out tie-ups with other public sector banks. The State Bank of Mysore managing director, M Sitarama Murty, said the two partners will utilise each other's customer base to cross-sell Maruti vehicles and the bank's car loans. He said the bank will charge a simple interest rate of 10.25 per cent, which works out to Rs 1,712 per month per lakh for a seven-year period. The bank will even finance second-hand cars, which will carry the same interest rate.
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Do not issue guarantees to co-op banks, states told
New Delhi: The Indian government has advised the Reserve Bank of India to issue instructions restraining states from issuing guarantees for co-operative banks. Finance Minister Jaswant Singh, while addressing the Parliamentary Standing Committee meeting here on Wednesday, made this announcement. The minister also said that the consolidated debt of all the States at 35 per cent of the GDP is unsustainable and urgent steps are required to rectify the situation.

Singh said that a mechanism needs to be developed to help the States, which are in financial difficulties, without affecting those who have conducted their affairs well. He also said that States should avoid resorting to competitive structuring of State annual Plan to get higher allocation and added that development and bankruptcy cannot co-exist.
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