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Bond yields rise - rupee touches six year high
Mumbai: The rupee was volatile against the dollar on the back of the yuan revaluation, and reached a six-year high. It scaled to an intra day high of 43.13 before closing at 43.48/49 on dollar buying.

Forwards market: The 12-month premium fell to 0.97 per cent (1.26) and the 6-month to 0.89 per cent (1.51).

G-Secs: Bond prices fell on Friday as the market tracked the spot rupee. The 7.55 5-year 2010 bond closed at Rs103.24 / 27, lower than Thursday's level of Rs103.33 / 38 (6.73 per cent YTM). The 7.27 8-year 2013 bond ended at Rs101.20/22 (7.07 per cent), down from the earlier level of Rs101.33 / 35 (7.05 per cent YTM). The 7.38 10-year 2015 benchmark paper closed at Rs101.55 / 60 (7.16 per cent YTM) against the previous level of Rs101.65 (7.15 per cent YTM).

Call rates: The inter bank rates opened at 5-5.05 per cent and closed at 3-4 per cent, as it was reporting Friday (5-5.10 per cent).

Reverse repo: In the auction under the Liquidity Adjustment Facility, RBI received and accepted 32 bids amounting to Rs10,485 crore.

CBLO market: 259 trades, put through in the 1.26-5.24 per cent range, amounting to Rs9,159.85 crore, were realised.
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Insurance employees to get a 13.3 per cent hike in wages
Chennai: Wage talks in the insurance sector have reached a successful conclusion with the employees of the Life Insurance Corporation getting a 13.3 per cent hike in wages.

The official notification is to be gazetted within the next 20 days, according to K. Venugopal, general secretary, All India Insurance Employees' Association.

The hike in wages will be effective from August 2002. According to the understanding, while employees in the 'class III' grade would get a hike of between Rs1,000 and Rs2,000 per month, officers would get between Rs2,000 and Rs3,000 per month. Senior management personnel in LIC would get a hike of about Rs5,000 per month..

Simultaneously, a wage hike for the employees of the four general insurance companies is also on the anvil.

According to J. Gurumurthy, secretary, All India Insurance Employees Association, general insurance companies had been offered parity with LIC pay scales. This is what they had been demanding earlier.

As per the terms of the offer, employees in the assistant and senior assistant grade would get a hike of between Rs1,000 and Rs1,500 per month, while officers would get about Rs1,500 to Rs2,500 per month. Those in the managerial cadre would get a hike of between Rs3,000 and Rs5,000 per month.

According to the proposal, transfers and redeployment would be within a radius of 250 km for employees in metros and within regions for employees in non-metro areas. Transferred employees would be offered a "disturbance allowance" of Rs400 per month during the period of posting, while their house rent allowance (HRA) and city compensatory allowance (CCA) would be protected.

There is a proposal to reduce the number of casual holidays to 12 from the nearly 25 days existing currently. There is also a proposal to increase the working hours by 15 minutes daily. The unions are opposed to the linking of these issues with wage revisions and have argued that there should be no pre-conditions for wage hikes.
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Allahabad Bank and PNB to buy bank in Kazakhstan
Chennai: The Allahabad Bank and the Punjab National Bank intend to buy a bank jointly in Kazakhstan, according to O.N. Singh, chairman and managing director, Allahabad Bank. Earlier the two banks had planned to set up a joint venture in Kazakhstan, but have now given up on the idea.

A decision on the acquisition could be made in three months, he added.

Kazakhstan is one of the areas where the bank is planning overseas ventures, the others being a branch in Hong Kong and a representative office in China.

Singh also said that Allahabad Bank had decided to enter the insurance sector through its subsidiary, Allbank Finance Ltd. The bank had engaged Ernst & Young (E&Y) to advise it on which insurance segment to enter — life or non-life — and with which partners, he added.

E&Y has also been asked to develop a business model for the bank's merchant banking operations, which it intends to start shortly, also through Allbank Finance Ltd.

Meanwhile, the Rs300-crore IT initiative of the bank is well under way and a vendor for the core banking software would be selected shortly, Singh said.
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Goldman Sachs may up stake in Kotak subsidiaries
Hong Kong/Mumbai: According to reports emanating in the media, Goldman Sachs is in talks with Kotak Mahindra that could lead to the purchase of a majority stake in its Indian investment banking and securities joint ventures.

According to the reports, Goldman Sachs wants to increase its stakes of 25 per cent in Kotak Mahindra Capital, an investment banking joint venture, and Kotak Securities, a broking alliance.

The US bank entered into the two joint ventures in 1995.

Goldman Sachs said yesterday it continued to "review the ways we can best work together to serve our respective clients in India. The joint ventures have served our clients well and have been very successful".

Uday Kotak, vice chairman, managing director and founder of Kotak Mahindra, yesterday said, "At this stage it is all speculative."

Indian companies account for nearly a quarter of the $32.2 billion raised on equity markets in Asia-Pacific so far this year, the second-largest percentage behind China, according to research published by JPMorgan.

Goldman Sachs would be permitted to acquire full ownership of Kotak Mahindra Capital and Kotak Securities, which as subsidiaries of Kotak Mahindra Bank are unaffected by the recent changes in ownership rules that limit foreign stakes in Indian banks to 5-10 per cent.
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SBI Life to introduce new products
Mumbai: SBI Life Insurance will be introducing a slew of new products this fiscal, according to S Krishnamurthy, managing director and CEO, SBI Life Insurance. The company, which derives about 67 per cent of its business from bancassurance, plans to diversify and have a more balanced portfolio of products, he said.

SBI Life will offer a creditor protection cover for SBI's India Millenium Deposits. The company will also launch a unit-linked insurance plan (ULIP), a single premium product, a savings product as well as pension products.

Krishnamurthy said with the capital market booming, the demand for ULIPs is on the rise.

SBI Life has reported new business premium of Rs482 crore in 2004-05. The premium from bancassurance, which grew three times compared to the previous year, was the major driver of growth, he said.
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Yes Bank to expand branch network
Pune: With about 30 branch licences approved by the Reserve Bank of India, Yes Bank is all set to expand its branch network in the country.

The bank has identified the metros and growth cities as its target locations and the branches would be set up by March 2006, according to Rana Kapoor, managing director and CEO. Speaking to newspersons, he said that the bank would be opening up its first branch in Pune in 45-60 days. It would house a knowledge centre for the auto and IT segments.

Two more branches would be opened up in Mumbai and one each in Nashik and Nagpur soon.

The bank has identified industry segments, agri business, textiles, life services, selective manufacturing, infrastructure, renewable energy, telecom and IT as its focus areas "where it would evolve more."

The bank has already clocked revenues of Rs1,750 crore so far and is targeting Rs4,500 crore by March 2006. Of this, about Rs3,300 crore is expected to come in from loan totals.
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Banking and financial companies' results: Karur Vysya, SMGB
KVB first quarter net rises Rs3.5 crore
Karur Vysya Bank's (KVB) net profit for the quarter ended June improved marginally to Rs37.62 crore, up by Rs3.52 crore compared to the corresponding previous period.

The bank has managed to strengthen its bottom line despite a decline of Rs3.64 crore in total income and an increase of Rs7.83 crore in total expenditure (before taking provisions and contingencies into account). Its operating profit, however, fell by Rs11.47 crore to Rs41.98 crore (Rs53.45 crore).

KVB's other income has fallen to Rs18.25 crore (Rs22.71 crore). Bank sources said that to avoid future depreciation, the bank had booked losses on certain investments, resulting in a decline in other income.

Interest and other operating expenses have shot up to Rs88.6 crore (Rs84.24 crore) and Rs40.67 crore (Rs37.21 crore) respectively.

SMGB posts Rs.19 crore profit
The South Malabar Gramin Bank (SMGB), a regional rural bank with operations in Kerala, has said that its total business in 2004-05 grew 20 per cent to Rs2,185 crore over the previous fiscal.

Net profit of the bank stood at Rs19.20 crore after making all statutory provisions and payment of salary arrears of Rs2.40 crore, the SMGB said in a statement here. Total deposit during the year was Rs1,045 crore, while advances stood at Rs1,140 crore.

"The bank continues to be the largest among rural regional banks in India," the bank said.

Deposits increased by Rs137 crore and advances by Rs228 crore during the fiscal. Level of the gross non-performing assets (NPA) was brought down to 3.9 per cent from 5.7 per cent a year ago.

In the current financial year, SMGB hopes to increase its total business to Rs2,600 crore. Deposits would rise to Rs1,200 crore while advances would be enhanced to Rs1,400 crore from previous year. SMGB plans to disburse Rs823 crore during the year for agriculture and allied purposes, the statement said.
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