LT Infrastructure Finance to issue tax-saving infrastructure bonds

LT Infrastructure Finance Company is making a public issue of Long Term Infrastructure Bonds 2011, to finance infrastructure lending.

The company proposes to issue secured redeemable non-convertible debentures aggregating up to Rs 100 crore with an option to retain an oversubscription of up to Rs 300 crore for allotment of additional bonds.

The bonds having benefits under Section 80CCF of the Income Tax Act, 1961, will open for subscription on February 7, 2011, and close on March 7, 2011.

The bonds have been rated as "Care AA+." by CARE and ''LAA+'' by ICRA, indicating high safety for timely servicing of debt obligations with high credit quality and low credit risk.

The bonds will carry a minimum lock-in period of five years from the date of allotment and can be redeemed after 10 years from the date of allotment.

The issue is proposed to be listed on the National Stock Exchange of India Limited (NSE).
More: http://in.news.yahoo.com/l-t-infra-finance-issue-tax-saving-infrastructure-20110203-045900-785.html

Deutsche Postbank Cuts Home Loan PLR.

Deutsche Postbank Home Finance Limited has reduced HBLR by 50 basis points for existing and as well as new customers. With this, the rates of interest on home loans of all existing variable-rate customers would come down by 0.5 percent. While the new rates will come into effect from 7th January 2009 for new customers, the reset date for existing customers shall be 1st March 2009, in order to accommodate implementation across the entire customer database.
DPHFL has recently gone for an ECB of 27 million Euros from its parent Company, Deutsche Postbank, AG, Germany, post relaxation of RBI ECB norms. This, along with the National Housing Bank s special Repo Window for HFCs have positively impacted DPHFL s cost of funds, which has been promptly passed on to its 29 thousand strong customer base.

The Company, which has one of the lowest NPAs in the industry is assigned credit rating of "P1+" by CRISIL and "LAA+" by ICRA and Fitch. With the strong parentage and support of its parent Company, Deutsche Postbank Home Finance Limited is aiming towards becoming a leading player in mortgage finance market.

Deutsche Postbank Home Finance Ltd has grown continuously in the past five years in India to become one of the fastest growing housing finance companies in the country. In the half year ended Sept. 2008, the Company has exhibited an impressive financial performance. The portfolio as on 30th Sept. 2008 stands at Rs 3581 crores, having grown from Rs 2508 crores as on 30th Sept. 2007. The company has a network of 40 branches and satellite offices across India, ensuring door step accessibility in almost all the major urban hubs.

India’s second-largest lender plans to curb new loans to preserve capital - said Chanda Kochhar

Chanda Kochhar, ICICI Bank Ltd.’s new chief executive officer, said India’s second-largest lender plans to curb new loans to preserve capital, bucking the central bank’s call for credit growth to revive the economy.

“In the coming year, the growth rate for us would be pretty moderate” on loans, Kochhar, who takes the helm at the Mumbai-based lender tomorrow, said in an interview in her office. “In times like these, you have to conserve capital, you have to maintain liquidity and you have to contain risk.”

Reserve Bank of India Governor Duvvuri Subbarao told banks to increase lending by at least 20 percent to drive an economy growing at the slowest pace in six years. Kochhar, 47, takes the top post at ICICI following a year in which the bank’s advances dropped 3 percent, compared with a 17.5 percent gain in India’s total bank credit, and the stock posted its worst year on record.

The slump in loans may make it harder for ICICI to revive earnings after posting the steepest fall in quarterly profit in more than six years for the three months ended March 31. The bank set aside more funds for bad debt and curbed loans and overseas operations to avoid defaults during the quarter.

“The bank remains in a transition phase and further restructuring/downsizing is expected to impair medium-term profit outlook,” Prabodh Agrawal, an analyst at IIFL Research in Mumbai, said in a note on April 27.

Agrawal forecasts ICICI’s loans are likely to drop by 5 percent to 10 percent in the year that started April 1, and net income will decline 17 percent. He recommends clients reduce their holdings in the bank.

Changing Deposit Mix

“What we are concentrating on is to change our deposit mix” to reduce the cost of funds, said Kochhar, currently chief financial officer of the bank. “In a volatile scenario like this, its important that we reduce the reliance on bulk and wholesale deposits and increase our proportion of current and savings accounts.”

The bank aims to increase current and savings account deposits as a proportion of total funds to 33 percent, from 28.7 percent as of March 31, said Kochhar. That increase will take at least a year for the bank, which plans to add 580 branches to extend its network to about 2,000, to accomplish, she estimated.

First Bank Employee

Kochhar, a 25-year veteran, became the bank’s first employee when the parent company decided to set up a lender in 1993. She built up ICICI’s retail lending operations, where loans climbed 20-fold under her leadership, ICICI has said. She was appointed to the board in 2001.

India’s central bank has cut its key rate by 425 basis points since October to the lowest on record to encourage banks to lend. Subbarao on April 21 forecast that India’s economy will grow 6 percent in the year that started April 1, the slowest pace since 2003.

“There is an urgent need to boost the flow of credit to all productive sectors of economy,” Subbarao said in the central bank’s annual monetary policy report.

ICICI, whose stakeholders include Temasek Holdings Pte and the Singapore government, aims to instead tighten norms for credit cards and most unsecured personal loans, and use deposits to pay down debt, Kochhar said. The bank has subsidiaries in the U.K. and Canada, through which it mainly offers overseas loans to Indian companies.

Run on the Bank

ICICI’s deposits shrank 11 percent in the 12 months to March 31 after it racked up the biggest losses among Indian lenders tied to the global financial crisis, leading to a brief run on the bank in September and more withdrawals as depositors grew concerned about its financial strength and shifted to state-run lenders.
Get more details from: Bloomberg.com

Millions of new customers of State Bank of India in 2008-09

Leveraging the huge distribution network of parent State Bank India (SBI), SBI Life Insurance covered 13 million new lives during financial year 2008-09. The new business premium of the company rose by 12 per cent over the previous year to reach Rs 5,386 crore.

US Roy, managing director and chief executing officer, SBI Life Insurance, said, “We will continue to focus on enhancing the all-round quality of our business. Despite the prevailing slowdown, we outpaced life insurance industry’s growth rate.”SBI Life also witnessed changing customer preference towards traditional products with inflows in unit-linked insurance policies (Ulips) accounting for just over 60 per cent of total new business premium collected.

Ulips have been driving growth rate of insurance companies for the past two-three years. SBI Life Insurance accounts for 15.46 per cent of marketshare among private sector life insurance companies as per the Insurance and Regulatory Development Authority (Irda) report February 2009.

With changing customer interest, SBI Life now has a balanced mix of business of market-linked and traditional products in the company portfolio. The company launched couple of new products in the last quarter of the financial year. The total assets under management of the company grew by 43 per cent to Rs 14,964 crore.
To fund its expansion plans SBI Life will infuse additional capital of
Rs 500-600 crore in this financial year. At present, SBI Life has Rs 1,000 crore equity.

Get more details from: Mydigitalfc.com

ICICI Bank consolidated net profit rose 17.66 per cent to Rs 748.44 crore during the quarter-ended March 2009

ICICI Bank, the country’s second largest bank, today said that its consolidated net profit rose 17.66 per cent to Rs 748.44 crore during the quarter-ended March 2009 as its expenses fell more than the decrease in income.hion, food, travel, sports, health...
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On a standalone basis, the private sector lender’s net profit dropped over 35 per cent to Rs 743.76 crore during January-March 2009, as against Rs Rs 1,149.84 crore during the corresponding period in 2007-08. The fall was on account of an 11 per cent decrease in income and a 14.46 per cent rise in non-tax provisions which were mainly related to bad debt.

While net interest income went up 2.9 per cent to Rs 2,139 crore at the end of the fourth quarter, other income declined by over 29 per cent due to lower corporate fee income and reduced third-party distribution and low disbursals, which impacted retail fee income. Treasury income was, however, 30 per cent higher at Rs 214 crore.

While the economic downturn has affected loan disbursals of most banks, ICICI Bank saw a 3.24 per cnet drop in the size of its loan book to Rs 2,18,310.85 crore at the end of March 2009, as against Rs 2,25,616.08 crore at the end of the previous financial year.

Its asset base shrank 5.13 per cent to Rs 3,79,300.96 crore at the end of March 2009 from Rs 3,99,795.08 at the end of March 2008.

The bank’s deposit base contracted 10.67 per cent to Rs 2,18,347.82 crore at the end of March 2009 from Rs 2,44,431.05 crore in March 2008. This was a result of the bank’s reluctance to raise high-cost bulk deposits. It, however, managed to increase the share of current account and savings bank account (Casa) balances in the total deposit base. At the end of March 2009, the Casa ratio improved 226 basis points to 28.7 per cent, from 26.1 per cent in the previous year. During the fourth quarter, the bank’s Casa ratio improved by 130 basis points.

In an investor presentation, ICICI Bank said raising the Casa ratio and rebalancing its funding mix will be a thrust area for which it intends to leverage its network of branches. Besides, lending would be selective — it intends to go for selective lending and “proactive management of the existing portfolio”.

Read more from: Business Standard.com

The State Bank of Travancore offers online home loan at 8% interest

The State Bank of Travancore has given a double boost to the sagging home loan business, offering home loans at 8% for one year as against the current rate of 10.25%, and offering home loan applications on the net.

SBT managing director A K Jagannathan said here that the twin moves were expected to provide a shot in the arm for the bank’s home loan business as well as giving a stimulus to the housing sector.

In addition, the bank will offer car loans
to customers at 10% for one year, as against the existing rate of 11.5%. Mr Jagannathan said the special interest rates for one year would revert to the existing rate after the term, and the new rates would depend on the prime lending rates existing at that time.

He said SBT was working on strategic initiatives and new businesses and was aspiring to be one of the top five banks in the country. Towards this end, mobile banking business was also on the bank’s radar, he said.

SBT is the leader in Kerala in NRI remittances and the bank has so far recorded remittances to the tune of Rs 13,000 crore this fiscal. Mr Jagannathan said SBT was also the fourth largest among banks in the country in the car loan portfolio.

The bank has tied up with Avenues India for e-commerce facilities, which will enable its customers to be connected to over 2,500 e-merchants across the country and conduct transactions in a safe and secure manner.

SBT’s net profit for the first three quarters of 2008-09 was Rs 415.81 crore, as against Rs 236.91 crore in the corresponding period of the previous year. The total business of the bank crossed the Rs 71,000 crore milestone at the end of the third quarter.

Read More From:Economic.indiatimes.com

For special home loan scheme LIC ignored by Indian Govt.

State-owned banks, which have included free life insurance cover in their special home loan package, have mostly preferred to do business with their life insurance subsidiaries rather than state-owned Life Insurance Corporation of India.

On December 15, all state-owned banks announced a special home loan package that included free life insurance cover, in which premiums will be paid by the respective banks.

A tendering process was carried out by banks to choose life insurers, and LIC got orders from only eight banks, a source said. Total number of government-owned banks in the country is 27, including State Bank of India and its six associate banks.

When the package was announced, it was expected LIC would get maximum business from these banks, since both are owned by the state. LIC officials were not available for comment. While SBI owns 74 per cent in SBI Life Insurance Company, Canara Bank and Bank of India hold 51 per cent each in their respective companies. LIC has devised a scheme called Group Term Insurance Scheme for Special Home Loan Package that will be rolled out from March 1.

Premium pinches
Most public sector banks were of the view insurance premium is likely to result in loss for the bank. “It may happen the premium amount paid by the bank could eat up the profit earned by them in this special home loan scheme,” a banking industry official said.

Premiums paid by banks are likely to be Rs 2-3 for Rs 1,000 sum assured. Premium amount will depend on amount outstanding. In case a person defaults on the home loan, premiums will be charged on the amount outstanding plus interest.

“Banks would have made profit even if charging lower interest rates if the premium component was not there,” said an official at a state-owned bank. The interest rate bank charges for the special scheme is 8.5 per cent for loans up to Rs 5 lakh and 9.25 per cent for loans up to Rs 20 lakh. Duration of re-payment period is maximum 20 years for all tenures under this scheme.

Interest rates will be set for five years. After five years, borrower will have the option for going for a fixed rate or floating rate of interest. The special home loan package will be applicable for new loans that will be sanctioned up to June 30.
Source:business-standard.com