Sunday / February 16.


fsMumbai: After mark-to-market gains of over 30% from the ONGC stake sale in FY12, LIC is looking forward to the government’s divestment programme to raise its stake further in the oil & gas company if the shares are offered at an attractive price, said a source. Apart from ONGC, the insurer sees SAIL as an attractive opportunity. The government plans to sell 5% stake in ONGC and 5% stake in SAIL to meet its Rs 58,425-crore disinvestment target. At current market prices, the government’s stake sale in ONGC and SAIL could fetch the exchequer Rs 16,993 crore and Rs 3,440 crore, respectively. Among other stake sales lined up by the government, Coal India could fetch Rs 22,754 crore to the exchequer at the current market price. Disinvestments in REC and PFC together could raise Rs 3,279 crore. The 11.4% stake sale in National Hydroelectric Power Corporation (NHPC) could fetch Rs 2,515 crore. The government has already initiated the valuation process for HZL (29.5%) and Balco (49.%) stake sale. Estimates suggest the exchequer could get Rs 22,000-25,000 crore from both the companies. In both the companies, majority of the stake is owned by London-listed Vedanta Resources. According to reports, the government has raised its FY15 disinvestment target by 41% over last year to Rs 80,000 crore. The previous government had missed the disinvestment target for five consecutive financial years. In FY11 and FY12, the government had raised Rs 22,144 crore and Rs 13,894 crore , respectively, through disinvestment, against the budgeted target of Rs 40,000 crore each year. http://www.financialexpress.com/news/lic-sees-opportunity-in-divestment-of-ongc-and-sail/1303175





New Delhi: Finance minister Arun Jaitley on Thursday asked the top brass of the Income Tax department to focus on capturing the unaccounted wealth in certain sectors of the domestic economy to boost direct tax collections, which is constrained by huge amounts of tax refunds. While receipts from corporate, personal income and wealth taxes up to October 20 grew by 13.6% to R3.8 lakh crore on a gross basis, net receipts grew by less than 5% from a year ago to Rs 2.97 lakh crore as the department cleared the backlog of tax refunds. Tax officials are trying to collect R7.4 lakh crore of direct taxes this year. A refund of R80,850 crore has so far been made this year, said an official release quoting finance minister Arun Jaitley. According to sources, the government had in 2013-14 relied partly on calibrating the management of refunds to restrict fiscal deficit to 4.6%. The statement said that the minister asked officials to chase those sectors where domestic black money is most prevalent. The magnitude of unaccounted wealth within the country is much higher than what is kept abroad by some Indians, it said. http://www.financialexpress.com/news/arun-jaitley-tells-taxmen-to-chase-black-money-within-country/1303202




Mumbai: Weakness in the rupee on Thursday was seen as temporary by the Street. It expects the currency to remain stable in the near term, on improving macro economic parameters. Experts see capital flows continuing in India due to higher growth, lower inflation and control over the fiscal and current account deficit (CAD). On Thursday, the rupee ended at 61.45 to the dollar as compared to the previous close of 61.36. This was sparked by concern on slower fund flows to emerging markets as the US Federal Reserve (Fed) moves closer to raising interest rates after putting an end to its bond-buying programme. During intra-day trade, the rupee weakened to 61.55, its weakest level since October 17. It rupee had opened at 61.52. Most global currencies had recorded a fall against the dollar on Thursday. The rupiah (Indonesia), peso (Philippines), won (South Korea) and ringgit (Malaysia), as well as the euro, recorded a higher fall compared with the previous close. http://www.business-standard.com/article/finance/rupee-weakens-on-fed-decision-114103001342_1.html





Kolkata: Allahabad Bank’s net profit – pulled down by higher tax expenses and fall in other income — fell 49% to R141.44 crore during the quarter ended September, the state-owned bank reported on Thursday. The net profit in the year-ago period was R275.81 crore. The city-based lender’s tax outgo during the quarter grew a whopping 110% y-o-y, while its operating profit during the period under review remained nearly flat at R1,156.68 crore; it was R1,153.54 crore in the year-ago period. Total income during the quarter rose 2.1% y-o-y to R5,416.63 crore, as the bank’s other income fell 26% to R515.55 crore during the period; it was R695.99 crore in the corresponding period of the 2013-14 fiscal. Gross credit rose to R1.43 lakh from R1.33 lakh crore a year ago, a growth of 6.92%. Its NIM was 3.05%. Allahabad Bank said the rise in tax outgo was due to higher tax payment on operating profit and tax expenses on the profit from investment in government securities. http://www.financialexpress.com/news/allahabad-bank-net-falls-49-to-r141.4-cr/1303185




Hyderabad: Andhra Bank’s net profit more than doubled to R144.49 crore in the quarter that ended September 30, 2014. Higher income from retail-banking operations helped the bank increase its net profit 104.5% y-o-y; it was R70.65 crore in the last fiscal. Total income increased from R3,817.57 crore to R 4,423.62 crore due to higher interest income and better yield on advances. At the end of September 2014, gross non-performing assets (NPAs) of the bank were R6,884 crore and net NPAs R4,316 crore. CVR Rajendran, CMD, said Andhra Bank expected asset quality to improve substantially in the second half after recovery from agricultural loan waiver in the next two quarters from both Telangana and AP governments. “Our major problem has come from the agricultural loan waiver announcements from Andhra Pradesh and Telangana,” he said. The bank’s agriculture loan dues stood at R3,700 crore and R7,500 crore in Telangana and Andhra Pradesh, respectively. The bank has recovered R2,000 crore of NPAs this year. “About R1,000 crore of restructured accounts have been moved to NPA; that is why NPAs are up,” he said. http://www.financialexpress.com/news/andhra-bank-profit-doubles-to-rs-144-cr/1303187




Chennai: Stung by lower net interest income and a sharp increase in provisions, Indian Overseas Bank posted a net loss of Rs 245.51 crore for the quarter ended September 30,2014 as compared with a net profit Rs 132.55 crore in the year-ago period. Provisions zoomed 44 per cent to Rs 892.4 crore and asset quality worsened with the gross non-performing asset (NPA) ratio going up to 7.35 per cent in the July-September period compared to 5.84 per cent in the preceding quarter. Net NPA ratio for the Chennai-based bank was 5.17 per cent against 3.85 per cent in the same period. In absolute terms, gross NPA was Rs 13,334 crore as against Rs 10,351 crore in the preceding quarter. The bank’s provision coverage ratio as on September 30 this year stood at 48.74 per cent. Net interest income dropped by seven per cent to Rs 1,344.46 crore, which was lower than Rs 1,452 crore reported last year. Total income increased from Rs 5,999.7 crore for the quarter ended September 30, 2013 to Rs 6,440.7 crore. Total business of the bank grew by 5.4 per cent to Rs 4,20,739 crore from Rs 3,99,188 crore, a year ago. http://www.business-standard.com/article/pti-stories/indian-overseas-bank-q2-loss-at-rs-245-crore-114103000795_1.html




Mumbai: Chennai-based Indian Overseas Bank (IOB), which made a whopping Rs 892 crore provisioning for bad loans, said provisioning was due and the management took a decision to clean up the balance sheet. “This is an intentional aberration. We have cleaned up the balance sheet and corrected it. The Rs 3,000-crore addition to NPA was on top of Rs 2,600 crore additions in the first quarter,” said ADM Chavali, executive director of the bank, indicating that most of the large corporate accounts have now been identified as NPA and have been provided for. The high credit growth period of FY12 and FY13 has resulted in rise in NPA, said Chavali, who joined the bank in January 2012. The bank has now decided not to go for large corporate lending and the focus is on retail, agriculture and small and medium enterprises. Due to this cautious approach, loan growth remained muted, which grew by three per cent year-on-year. The lender is also cutting down its bulk deposits, which were as high as 39 per cent in March 2011. As on September-end, bulk deposits consists 21 per cent of total deposits, which is still high among peers. The aim is to reduce the proportion of bulk deposit to 15 per cent by March. http://www.business-standard.com/article/finance/iob-says-worst-is-over-sees-gross-npas-at-6-5-by-march-114103100024_1.html





Mumbai: The country’s largest private sector lender, ICICI Bank, on Thursday reported a net profit of R2,709 crore for the three months to September 2014, an increase of 15% over the R2,352 crore it had reported in the same period last year. Net profit, ICICI Bank’s highest ever in a quarter, was bolstered by a healthy growth in its non-interest income, up 26.4% on a year-on-year basis. However, asset quality deteriorated slightly with net non-performing loans (NPLs) moving up 24 bps y-o-y and 10 bps sequentially. The bank’s provisions were also up from R726 crore in Q1FY15 to R850 crore in Q2. Net interest income — or the difference between the bank’s interest earned and expended — stood at R4,657 crore in the quarter under review, 15.1% more than R4,044 crore reported in the same quarter of FY14. On the margin front, too, the bank saw an improvement with its net interest margin (NIM) rising 11 bps to 3.42% on a y-o-y basis, and sequentially margins were up by 2 bps. Corporate credit grew only 5% y-o-y in the quarter, lower than the 7.7% it had reported in Q1FY15. However, retail assets, which constituted 40% of the loan portfolio as on September 30, saw a growth of 25% on a y-o-y basis. This took its growth in domestic advances to 15% compared to the same period last year. Chanda Kochhar, ICICI Bank MD & CEO, said the improvement would be gradual with demand for working capital requirements increasing first. “I do think improvement will take place, but how long it will take depends on the recovery in the economic growth itself,” Kochhar said. http://www.financialexpress.com/news/icici-bank-net-up-15-at-rs-2709-cr/1303181




Mumbai: Private sector lender YES bank on Thursday posted a 30% y-o-y growth in net profit to R482.50 crore in the quarter ended September 30, on the back of robust growth in net interest income. YES Bank registered a 27.4% y-o-y growth in net interest income (NII), which stood at R856.40 crore, compared to R672.10 crore in the year-ago period. NII is the difference between interest earned and paid by a bank. The bank maintained a net interest margin of 3.2% — 20 bps more than the same quarter of FY14. Rajat Monga, CFO of YES Bank, said: “Growth in net profit is ably supported by a reasonably strong NII growth on the back of growth in advances and non-interest income. We have also seen expansion of margins.” The bank posted a 13.3% rise in non-interest income, which stood at R505.6 crore. YES bank also had a 14.6% y-o-y increase in operating profit, which was R817.1 crore. Advances grew 30% y-o-y to R62,029.6 crore, while total deposits rose 16% for the same period to R80,130.9 crore. Gross non-performing assets (NPAs) increased 8 bps y-o-y to 0.36% of the total advances, which was R222.4 crore, and the net NPA stood at 0.09%. http://www.financialexpress.com/news/at-rs-482.5-cr-yes-bank-profit-up-30-/1303184





Mumbai: Insurance companies have suffered losses of over Rs 4,000 crore in two natural disasters — Jammu & Kashmir floods and cyclone Hudhud in Andhra Pradesh and Orissa — that wreaked havoc in the last two months. While Jammu & Kashmir floods have led to insured losses of around Rs 1,500 crore, the losses due to Hudhud are estimated around Rs 2,500 crore. “Our estimate is that the total insured losses could be close to Rs 2,500 crore in Andhra Pradesh and Orissa due to Hudhud,” said a top official of public sector insurance firm. “We expect insured losses of Rs 1,500 crore in Andhra Pradesh,” said the chairman of another leading PSU insurance company. Insurance Regulatory and Development Authority (IRDA) chairman TS Vijayan had recently said that the regulator may look at having a separate catastrophe insurance as an option. “We’re worried about the next. I’m hoping that the cyclonic storm which is expected to hit the Gujarat coast will not cause damages,” New India Assurance chairman G Srinivasan said. As per the latest reports, cyclonic storm ‘Nilofar’ has weakened and would further weaken as it comes closer to Gujarat coast and cross it as a marginal cyclonic storm. http://www.financialexpress.com/news/insurers-lose-rs-4k-cr-in-j-k-floods-cyclone-hudhud/1302970





Mumbai: State-run infrastructure financing company IDFC on Thursday reported a standalone net profit of R470.15 crore for the quarter ended September 30, down 5.61% y-o-y. Net interest income of the non-banking finance company was R648 crore, down 6% y-o-y. Total income stood at R2,066.35 crore, down 14.87% y-o-y. Non-interest income stood at R449 crore compared to R198 crore in the same period last year. As a consequence, net interest margins (NIMs) were at 3.8% for the rolling 12-month period ended September 2014. IDFC, which won a banking licence in April, said its board approved the necessary procedures for transforming itself into a bank, as per RBI guidelines. IDFC Bank will issue one equity share of R10 each for every one equity share of Rs 10 each held in IDFC. On completion of the demerger, IDFC Financial Holding Company will hold close to 53% in the equity share capital of IDFC Bank while around 47% will be held by the shareholders of IDFC. During the quarter, IDFC raised R1,000 crore from domestic investors through a qualified institutional placement issue of 7.3 crore equity shares at R137 per share. Asset quality improved slightly and gross NPAs stood at R342.38 crore, or 0.62% of gross advances, down 2 bps from the preceding quarter. Net NPAs stood at R228.44 crore, or 0.42% of net advances. Provisions at the company, however, increased to R281 crore from R50 crore last year. http://www.financialexpress.com/news/idfc-net-down-5.6-at-rs-470-cr/1303183





New Delhi: Asking the Supreme Court to take cognisance of Sahara’s non-seriousness in selling its properties and making payment as per its directions, Sebi on Thursday sought a direction to the Sahara group to reveal all the offers it has received so far and explain why it has not acted upon them. The market regulator in its fresh application told the apex court that the shifting of the detenus from the prison barracks to the guest house was also permitted to enable sale/mortgage of these foreign assets and the court has not been yet informed of the offers received and the manner in which they have been dealt with. It has sought a direction to the Sahara group to file a statement setting out the details of all offers/bids received for sale/mortgage of the foreign assets and also pass a suitable orders for sale of foreign assets of Saharas to enable deposit of R47,000 crore as directed by the apex court. The Supreme Court on August 1 had allowed Sahara chief Subrata Roy and two of his group directors to use the fully air-conditioned conference room inside the Tihar Jail complex to enable him to hold negotiations with potential buyers to sell his three luxury hotels — Dream Downtown and The Plaza in New York and Grosvenor House in London — to raise Rs 10,000 crore, half in cash and half through bank guarantee to secure their bail. http://www.financialexpress.com/news/sebi-seeks-supreme-court-direction-to-sahara-to-reveal-offers/1303201




Coimbatore: In a heartening reversal of trend, retail investors seem to be coming back to equity investment with the retail folios of mutual fund schemes registering an addition of four lakh folios in the first half of the current financial year, taking the total folio accounts to 2.90 crore. However, the dominance of the corporates in the overall assets under management of the mutual funds continued, accounting for 47 per cent of the total asset base of the MF industry, according to an analysis done by CRISIL Research, a division of CRISIL. The CRISIL report pointed out that retail investors have come back to investing in equity mutual fund schemes after a considerable time lag. Equity funds’ retail folios had been sliding continually from the second half of fiscal 2011 till the second half of 2014. What fuelled the trend was the rally equity market had witnessed, rekindling investor interest in equity investment. The CNX Nifty was up 19 per cent in the first six months of the current fiscal (ending September) on expectations that the new Government would kick-start stalled economic reforms. However, according to the CRISIL report, at the aggregate level there was a marginal decline in retail folios because of a fall in balanced fund folios. Retail investors, generally blamed for being fickle, also seemed to show some maturity by sticking to their investments for a longer time. The report said that of the Rs. 1.72 lakh crore of retail investment in equity-oriented mutual funds, Rs. 1.10 lakh crore remained invested for more than two years. http://www.thehindubusinessline.com/todays-paper/tp-markets/retail-investors-flock-to-equity-mf-schemes/article6550256.ece

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