SBI to raise $1 bn through debt issue
New Delhi: State Bank of India plans to tap the overseas debt market to raise funds of about $1billion to fund its overseas expansion and foreign exchange requirements.

The bank has appointed Citibank, HSBC and Deutsche Bank for arranging the funds.

SBI's debt issue will be in the form of medium term note (MTN) and will have a duration of five years.

The bank did reveal the rate at which the MTN would be issued.

SBI had earlier raised funds through Resurgent India Bonds (RIBs) and India Millennium Deposits (IMDs). The RIBs fetched the bank more than $2 billion and IMD another $4.2 billion.

The SBI has plans to go for overseas acquisitions and is scouting for banks in countries like Mauritius.
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Andhra Bank hikes deposits rates
Hyderabad: Andhra Bank has hiked interest rates on domestic deposits by 50-100 basis points and 40 to 60 basis points for NRE deposits.

With this the rate of interest on domestic deposits for 15 to 45 days has increased from 3.75 to 4.75 per cent, 46 to 90 days from 4 to 5 per cent, 91 days to 179 days from 4.50 to 5.25 per cent, 180 to 364 from 4.75 to 5.60 per cent.

The interest rate for one year and above has been revised to 5.75 per cent.

Similarly, the interest rates on deposits under Non-Resident (External) Rupee Accounts (NRE) for the period one year to less than two years is revised from 2.30 to 2.90 per cent, two years to less than three years from 2.80 to 3.30 per cent and for three year and above tenure, the interest rate is increased from 3.20 to 3.60 per cent.

The revised rates are effective from November 9.
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Aviva infusing additional capital
Kolkata: Aviva India Life Insurance plans to infuse fresh capital of about Rs77 crore in the next couple of months.

The additional capital will take care of Aviva's aggressive growth plans and in building up infrastructure said senior company sources.

Aviva, currently is present across 135 locations, proposes to add another 100 offices to its network.

Nearly three fourths, 72 per cent of Aviva's business comes through the bancassurance channel. Currently, Aviva has bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, The Lakshmi Vilas Bank and Punjab & Sind Bank.

NTS
Aviva is planning to introduce a new unit-linked group superannuation product for corporates shortly.

The insurer has already filed the new product with IRDA.
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SBI results: up to expectations
SBI's results were upto analysts' expectations.

Net interest income rose 39.95 per cent to Rs 3,379.81 crore due to robust growth in the loan book (interest income rose 6.18 per cent to Rs 8,084.84 crore). Interest expended fell 9.50 per cent to Rs 4,705.03 crore. Net interest margins rose to 3.15 per cent from 2.79 per cent.

The bank took a 69.07 per cent hit on its treasury portfolio to Rs 467.93 crore as it didn't transfer securities to the 'hold to maturity' category from the 'available to sale' head.

Operating profit fell 8.95 per cent to Rs 2,604.93 crore due to the dip in other income (42.12 per cent down to Rs 1,652.59 crore).
Advances grew 24.16 per cent to Rs 181,093 crore. However, the yield on advances reduced 65 basis points to 7.78 per cent due to falling interest rates. Retail loans, too, increased 14.57 per cent to Rs 43,208.79 crore. Deposits grew 9.34 per cent to Rs 337,684 crore while the average cost of deposits fell 122 basis points to 5.31 per cent as a result of RIB (resurgent India bond) redemption in the previous quarter.

Net NPAs (non-performing assets) were up 40 basis points to 2.96 per cent due to lesser provisioning.
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Andhra Bank to transfer bad loans
Hyderabad: Andhra Bank will transfer about 50 non-performing asset (NPA) accounts amounting to Rs75 crore to various asset reconstruction companies (ARCs) this financial year. Sources informed that the bank is awaiting more ARCs to be granted operating licences from the Reserve Bank of India (RBI), since this will increase competition among ARCs and the bank would be able to realize a higher price realisation for its NPAs officials stated.

Earlier this year, the bank had transferred NPAs worth Rs23 crore to Asset Reconstruction Company of India Ltd (Arcil), earlier the sole player in the marketspace.

Recently, RBI granted operating licence to an ARC promoted by UTI-I, which has been floated primarily to take over the bad loans of UTI. It has also approved the incorporation of another ARC, Asrec (India), in which UTI-I holds 49 per cent stake.

Andhra Bank is aiming to achieve a zero NPA-level soon from its net NPAs of 0.2 per cent in the second quarter of the current fiscal, which was down from 1.07 per cent in the corresponding period last year.
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PNB coming out with public issue
New Delhi: The Punjab National Bank (PNB) plans to raise around Rs1,250 crore via a public issue by January 2005 and has applied for government approval.

PNB plans to sell 5 crore equity shares at around Rs250 per share through the book building route. Last week, its share price closed at Rs262.05 on the NSE. While ICICI Securities is the lead manager, Kotak, JM Morgan Stanley, Kotak Capital and DSP Merrill Lynch are co-lead managers for the issue.

Though, the capital adequacy ratio of PNB was 12.58 per cent as on September 30, 2004, against the statutory requirement of 9 per cent, bankers said the bank was raising funds to meet its growth requirements in view of the new Basel norms to be implemented in 2005. The new norms will not only increase the capital adequacy norm to 12 per cent but would also tighten the calculation of capital requirements, making the effective ratio more than 12 per cent.
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