Banks' earnings increase due to steel turnaround
Mumbai: Due to a turnaround in the steel industry, banks and financial institutions have upped their interest earnings as their non-performing assets (NPAs) have gone down. Banks and FIs have also improved the quality of their assets by converting a part of their debt into equity and have even booked profits by selling their equity in steel companies.

A portion of the lenders' debt exposure was recently converted into equity as part of the restructuring of some of the distressed assets. The collective impact on the bottomline of the financial intermediaries is going to be substantial this year. But none of the banks and institutions with large exposure to the steel industry is willing to quantify the gain at this point.
Back to News Review index page  

Aviva no to 100% FDI in pension business
Mumbai: Aviva Plc, a 11.5-billion pound sterling company, is keen to maintain its partnership with Dabur and does not want to hold a 100-per cent stake even if it is given the option. According to Aviva Plc managing director international Cees Schrauwers, "It is like being colour blind and needing someone to give proper insight. Even if we are allowed to hold 100 per cent, I would prefer to maintain our partnership with the Burmans, but hold a majority stake."
Back to News Review index page  

Banks do not want major changes in Sarfaesi Act
Mumbai: Banks want the basic character of the Sarfaesi Act 2002 to remain as it is and expect only minor procedural changes, which is supposed to be effected by the central government in response to the latest Supreme Court directive seeking redrafting of the law.

The apex court had asked banks, financial institutions and defaulting companies to come up with suggestions before 15 September, the next date of hearing in the Mardia Chemicals Vs ICICI Bank case, to fine-tune the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, 2002, as "it is heavily in favour of the lenders".
Back to News Review index page  

Bank of Baroda expects 35% profit growth
Mumbai: Bank of Baroda expects to post a 35-per cent growth in its net profit in the current fiscal, according to bank chairman P S Shenoy. "We expect operating profit to grow by 25 per cent in the current year over the last year while the net profit should grow by 35 per cent." The bank posted a 33-per cent year-on-year rise in net profit to Rs 2.44 billion ($53.2 million), or Rs 8.26 per share, for the last quarter ended 30 June.

Banks have been grappling with reduced demand from traditional big business in recent years as top-rated borrowers have chosen to either borrow overseas or have raised funds by tapping the bond market directly as yields slumped, reports say. This has led many banks to increase focus on retail loans to the emerging middle class, estimated at 300 million people. Shenoy said his bank will continue to focus on retail loans for growth while also targeting medium-sized businesses. "Retail loans grew 40% last year and we think this rate can be sustained in the medium term."
Back to News Review index page  

IDBI clears rejig package for Stone India
Kolkata: IDBI has cleared a restructuring package for Stone India Ltd, a GP Goenka group company, thanks to which the company will save about Rs 20 lakh every year on interest outgo. The IDBI package offers Stone India the relief from paying any penal interest on unpaid interests.

According to A Ray, managing director, Stone India, after the company's annual general meeting on Friday in Kolkata, "perhaps the worst was over." I Sen chaired the meeting in absence of Stone India's chairman G P Goenka. Sen said the company is planning to de-list its scrip some of the regional stock exchanges.
Back to News Review index page