June, 2016
Issue No. 7
Corporate Banking
  1. RBS to shut India operations, begins closure of branches

    Royal Bank of Scotland Plc (RBS) will wind up its corporate, retail and institutional operations in India and shut its 10 retail branches, as it exits the country as part of a plan to reduce its global footprint. RBS has less than 400 employees across operations in India, according to a spokesperson for the bank. The move to shut Indian operations is part of RBS’s global plan to reduce its international operations to 13 countries from the current 38. The plan was announced last year by chief executive officer Ross McEwan.

  2. ICICI Bank reduces its equity in overseas units

    ICICI Bank is looking at consolidating its position in the overseas market by shrinking its equity investment in its subsidiaries in the UK and Canada. The lender has significantly reduced its equity stake in both these subsidiaries from 11.8 per cent at the end of March 31, 2010, to 4.8 per cent at the end of FY16. At the end of the quarter ended March, in rupee terms, the net advances of the overseas branches also decreased by 0.3 per cent, whereas in US dollar terms, the net advances decreased six per cent. The management said in line with its strategy of rationalising capital invested in overseas subsidiaries, the bank received capital repatriation of 87.1 million Canadian dollars (Rs 452 crore) from ICICI Bank Canada during January-March, 2016.

  3. ICICI Bank reduces interest rates on bulk deposits by 15-25 bps

    India’s largest private sector lender ICICI Bank Ltd reduced interest rates on bulk deposits by 15-25 basis points (bps) across maturities. The interest rates on deposits with maturities between 91 and 184 days have been reduced by 25 bps to 6.75 per cent, from 7 per cent earlier. Similarly, the interest rate on deposits with maturities in the range of 271-330 days has been reduced by 15 bps to 7.25 per cent from the earlier rate of 7.4 per cent. The rate reductions are applicable on deposits worth Rs 1 crore and above. The bank had reduced the interest rate on bulk deposits by up to 55 bps on 31 March, 2016.

  4. HDFC Bank targets to double customer spends on Smart Buy in FY17

    HDFC Bank aims to double customer spends on its marketplace, SmartBuy. At SmartBuy, thanks to the bank’s numerous tie-ups with various merchants, the bank’s debit/credit customers can shop online. Within this financial year, SmartBuy will have spends of over Rs 1,000 crore vis-à-vis a little under Rs 500 crore in FY15. Given the bank’s wide network both on the customer and the merchant side, it made sense for the bank to connect the two on a common platform to inspire heightened loyalty.

  5. IDFC Bank aims to tap govt’s subsidy pipeline

    With a focus on mass rural market, IDFC Bank’s Bharat Banking division, a business which focuses on small towns and villages, is eyeing government business such as disbursal of subsidy and scholarships in a big way. It has started tying up with state governments for various schemes and is also looking to provide microfinancing. IDFC Bank has already partnered with Andhra Pradesh government in the Krishna district for direct benefits transfer (DBT) through Aadhaar-enabled payment system (AEPS). Besides, the bank will look at microfinancing schemes for purchase of motorcycles, equipment and even low-cost housing.

  6. HSBC to issue $2 bn of convertible bonds

    HSBC Holdings will issue $2 billion of bonds that would convert into shares if the bank’s capital strength falls below a certain level. HSBC said the so-called contingent convertible bonds, or ‘CoCos’, would pay an annual interest of 6.875 per cent. The bonds will convert into shares if HSBC’s core equity Tier 1 capital ratio falls below 7 per cent. Bonds, which convert into shares or are cancelled when a bank’s capital falls below a certain level, are increasingly being sold by banks to improve their capital cushion in case they run into trouble. Regulators want banks to sell the bonds to provide a bigger cushion to prevent the need for taxpayer bailouts that were seen in the 2007-9 financial crisis.

  7. SBI Q4 net profit falls 66% to Rs 1,264 cr

    State Bank of India (SBI) posted 66 per cent slump in standalone profit to Rs 1,263.81 crore for the fourth quarter of last fiscal ended March 31 as it more than doubled the provisions for bad loans. SBI had reported net profit of Rs 3,742.02 crore in the corresponding January-March quarter of the previous fiscal 2014-15. Total income (standalone) has increased to Rs 53,526.97 crore for the quarter ended March 31, 2016 from Rs 48,616.41 crore for the same quarter year ago. Its provision towards bad loans alone was raised to Rs 12,139.17 crore during last quarter of 2015-16, up from Rs 4,985.83 crore in the year-ago period. In all, Rs 13,174.05 crore was parked towards provisions as well as contingencies during the quarter, as against Rs. 6,943.31 crore in the same quarter of 2014-15. For the entire 2015-16 fiscal, Bank reported 24 per cent decline in net profit to Rs 9,950.65 crore. SBI’s net profit in 2014-15 stood at Rs 13,101.57 crore. Total income has increased to Rs 1,91,843.67 crore for the year ended March 31 from Rs 1,74,972.96 crore for the year ended March 31, 2015.

  8. Bandhan Bank posts Rs 275-cr net profit

    The newly-opened Bandhan Bank reported a net profit of Rs 275.25 crore for nearly seven months period during August 2015-March 2016. However, Bandhan's profitability is of little surprise, as the bank has, so far, remained mostly a micro-lender, shying away from large-scale retail and corporate loans. The bank's gross NPA stood at 0.15 per cent, while net non-performing assets stood at 0.08 per cent at the end of 31 March 2016.

  9. Bank of Baroda recovers Rs 3,200 credit from non performing loans in Q4

    Bank of Baroda (BoB) recovered close to Rs 3,200 crore from non-performing loans during the March 2016 quarter, including from assets that were upgraded. As on March 31, the state-owned bank’s gross non-performing loans (GNPL) stood at Rs 40,521.04 crore or 9.99 per cent of its total advances. Of the total recoveries, around Rs 1,700 crore came from accounts that were upgraded once dues were paid. The remaining Rs 1,500 crore came from accounts that remained non-performing. BoB reported a net loss of Rs 3,230.14 crore for the March quarter as it saw provisions rising nearly four times compared with the same quarter a year ago. The rise in provisions was primarily due to the asset quality review conducted by the Reserve Bank of India across the banking sector, following which banks needed to recognise a list of stressed assets as non-performing ones.