Top Stories
LIBOR scam... Bob Diamond resigns as Barclays CEO
Bob Diamond has stepped down as the chief executive officer (CEO) of Barclays Plc after days of speculation about his future following a £290mn penalty imposed by British and American regulators related to manipulation of interbank lending rates.
Marcus Agius, Barclays' outgoing chairman will return as the head of the UK lender's Board and lead the search for a new CEO. Candidates from inside and outside the company will be considered, Barclays said today. Agius had announced his resignation on Monday… Read more
JP Morgan Chase investigated by FERC: Reports
JP Morgan Chase & Co is reportedly being investigated by US energy regulators who have subpoenaed the firm twice over a three-month period, according to media reports.
On 2nd July, the Federal Energy Regulatory Commission (FERC) filed a petition in federal court in Washington asking the court to order the bank to show cause as to why it would not comply with a subpoena issued by the Commission as part of its investigation into the bank's power trading.
The regulators are investigating whether the US banking group manipulated power markets in California and the Midwest, the reports added.
Q1FY13: What to expect from banking this quarter?
System loan and deposits growth on sequential basis is likely to be muted with data till June 15 indicating a flat trend. This is attributable to seasonal weakness in credit demand during Q1 on the back of typical acceleration in disbursals towards the end of the year (PSL target + seasonality in corporate loan demand). YoY growth in credit has been resilient so far to significant moderation in economic and industrial activity but is likely to catch up soon. We therefore expect 15-16% credit growth for FY13, lower than current growth rate of 18-19%.
Our recent interactions with few banks suggested that retail loan growth has been robust while corporate lending has become relatively unattractive due to high wholesale funding rates… Read more
India's manufacturing PMI rises in June: HSBC
India's manufacturing output improved in June as companies stepped up production and hiring at the fastest rate in more than two years, but exports orders slackened due to weak global economy, a survey by HSBC and Makit Economics showed on Monday… Read more
In Focus News
ICRA reaffirms “AAA” rating of IL&FS long-term debt
IL&FS is the Group Holding Company and has investments in various business verticals. IL&FS Group Companies are involved in infrastructure projects sponsorship and development in addition to advisory services, investment banking, and asset management and other financial services related activities.
ICRA has reaffirmed its “ICRA AAA” rating with stable outlook with regard to the Long Term Debt issued by IL&FS for an amount of Rs. 1,660 crore (current outstanding Rs. 832 crore) including new Long Term Rating for Non Convertible Debentures aggregating to Rs. 500 crores to be issued by IL&FS… Read more
Moody's changes outlook on Barclays' standalone rating to negative
Moody's Investors Service has today changed the outlook on the C-/ baa2 standalone bank financial strength rating (BFSR) of Barclays Bank plc to negative from stable. The C-/ baa2 standalone BFSR as well as the A2 long-term and Prime-1 short-term debt ratings remain unchanged. The A2 senior debt and deposit rating already has a negative outlook due to Moody's expectation that the UK government will reduce its support for large UK banks over the medium term. Today's action extends this negative outlook to Barclays' standalone BFSR rating and the bank's subordinated debt and junior capital instruments, which are notched off the standalone rating… Read more
Learning
Imarticus Learning announces investment banking courses
Imarticus Learning, provider of industry specific education programs, has launched investment banking courses. The company will offer CISI (Chartered Institute for Securities & Investment) endorsed certified training programs designed for rewarding careers within investment banking, catering to students, career changers or job aspirants. The first campus will be launched in Mumbai and the first batch is scheduled to begin mid September 2012. The training will be followed by placement assistance and career preparation support… Read more
Domestic News
RBI extends FCCB buybacks till March 2013
The Reserve Bank of India (RBI) has decided to continue the scheme of buyback of FCCBs subject to certain modifications. Accordingly, the RBI will consider proposals from Indian companies for buyback of FCCBs under the approval route subject to the following conditions: The buyback value of the FCCBs shall be at a minimum discount of five per cent on the accreted value… Read more
RBI revises criteria for declaring dividend by UCBs
The Reserve Bank of India (RBI) has decided to revise the criteria for declaring dividend without prior permission of the apex bank. Accordingly, Urban Cooperative Banks (UCBs) may henceforth declare dividend subject to compliance with the following parameters… Read more
Oriental Bank to hire 400 officers; Indian Bank to hire 1,200 clerks
Oriental Bank of Commence and Indian Bank reportedly plans to recruit people across the country for clerical and officer post.
According to reports, Oriental Bank is recruiting 425 probationary officers/agricultural officers out which 325 vacancies are for probationary officers and remaining 100 posts for agricultural officers.
Indian Bank plans to fill in 1,200 clerks position across its branches in India… Read more
Indian ultra HNHs grow 30% in FY12: Kotak-CRISIL study
Kotak Wealth Management and CRISIL Research launched the second edition of the 'Top of the Pyramid' report in Mumbai.
The report reveals interesting facts and trends about spending, investing and income patterns of India's ultra high net worth households (ultra HNHs) amidst global uncertainty and slowdown in the Indian economy. Additionally, the special focus areas of the report are luxury cars and education… Read more
Citi India FY12 net profit rises 35%
Citi India reported a strong financial performance for the year ended March 31, 2012. During the period, profit before tax for Citibank N.A. India rose 37% to Rs. 32.97bn in financial year 2011-12 from Rs. 24.02bn in financial year 2010-11. Profit after tax rose 35% to Rs. 19.22bn from Rs. 14.24bn during the same period.
Total assets for Citibank India grew 15% to Rs. 1284.28bn at March 31, 2012 from Rs. 1115.86bn at March 31, 2011, driven by growth in the commercial banking segment, higher trade assets for global banking customers and growth in the mortgage business.
The Bank's deposits grew 14% during the financial year 2011-12 to Rs. 64,698 crore and the CASA ratio stood at 55%. At March 31, 2012, the Bank's net non-performing loans were lower at 0.9%from 1.2% in the previous year, and its capital adequacy stood at a healthy 16.03%... Read more
IDBI Bank concludes 1st deal on web-based NDS OM
IDBI Bank has become the first Primary Member in the country to enable one of its Gilt Account Holders to transact through RBI’s Web-based Negotiated Dealing System (NDS) OM module by concluding the first such deal in the Indian market on July 2, 2012, which was the first working day after the system was operationalised.
RBI’s Web-based NDS OM module, operationalised on June 29, 2012, facilitates internet based access to Gilt Account Holders (GAH) to directly participate in secondary market of Gilts… Read more
Union Bank slashes interest rate on agriculture loans up to 175 bps
As one of the measures to boost credit flow to agriculture, Union Bank of India has reduced interest rates for various categories under agriculture up to 175 bps.
Now, crop loans, investment credit and loans for allied activities up to Rs. 50,000 will be available at base rate only. Interest rate for lending to self help groups (SHGs) has also been reduced by 175 bps. The revised interest rates are effective from 1 July 2012. At present, the base rate of Union Bank of India is 10.50 %... Read more
CBDT issues notification on e-filing of I-Tax returns
Central Board of Direct Taxes (CBDT) has issued a notification S.O. 626(E) dated 28th March 2012 vide which e-Filing has been made compulsory for Assessment Year 2012-13 onwards for an individual or a Hindu undivided family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds Rs 10 lakh; and an individual or a Hindu Undivided Family (HUF), being a resident, having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4… Read more
Global News
China cuts benchmark lending and deposit rates
European stocks and US equity index futures rose, while commodities rallied and the euro pared losses after China cut interest rates. China cut its benchmark deposit rate by 25 basis points and lending rate by 31 basis points, according to media reports.
This is the second rate cut by the People's Bank of China (PBOC) since early June, according to reports. The Chinese central bank also announced more relaxed rules on lending, allowing bank lending rates to fall to 70% of the benchmark rate, down from 80% currently. The PBOC cut both benchmark lending and deposit rates by 0.25% on June 7, the first reduction since 2008... Read more
BOE boosts QE program; Leaves rates steady
The Bank of England (BOE) on Thursday resumed its asset purchases as the British central bank looks to shore up the domestic economy stuck in a recession.
The BOE boosted the size of its asset-purchase program, the centerpiece of its quantitative easing (QE) program, as policy makers seek to head off a deepening recession. The UK central bank said today that its Monetary Policy Committee voted to conduct bond purchases worth an additional £50bn (US$78.1bn), bringing the total size of the stimulus to £375 bn… Read more
S&P lifts Philippines’ rating to 9-year high; Outlook stable
The Philippines’ debt rating was raised to the highest level since 2003 by Standard & Poor’s, lifting local bonds and the peso.
The nation’s long-term foreign currency-denominated debt was raised one level to BB+ from BB, S&P said in a statement yesterday. That is one step below investment grade and on a par with neighboring Indonesia. The outlook on the rating is stable.
“The foreign currency rating upgrade reflects our assessment of gradually easing fiscal vulnerability,” Agost Benard, a Singapore-based analyst at Standard & Poor’s, said in a statement… Read more
ECB cuts refinance rate by 25 bps to record low 0.75%
The European Central Bank (ECB) on Thursday lowered its benchmark lending rate by a quarter percentage point in a bid to try and shore up sentiment across the debt-stricken region teetering on the brink of another recession.
Policy makers meeting in Frankfurt today lowered the ECB’s main refinancing rate to 0.75% from 1%, as predicted by most economists. The ECB also cut the deposit rate on money parked by banks with it overnight, to 0% from 0.25%, while the rate on its marginal lending facility was reduced to 1.5% from 1.75%.
ECB President Mario Draghi is scheduled to hold his monthly news conference in Frankfurt later today to explain the decisions… Read more
Temasek Portfolio at S$198 bn
Temasek Holdings (Private) Limited (Temasek) has released its latest annual performance review, Temasek Review 2012 – Extending Pathways.
In the financial year that ended 31 March 2012, Temasek Review 2012 reports a record year end portfolio value of S$198 billion, up from S$193 bn the previous year. Temasek also ended the financial year with a net cash position… Read more
Bob Diamond testifies before UK parliament panel
Robert Edward "Bob" Diamond, the ex-CEO at Barclays Plc, on Wednesday testified in front of a UK parliamentary committee over the interest-rate fixing scandal. The former Barclays chief executive testified in front of the UK Parliament’s Treasury Select Committee.
A day before, Diamond and the company’s chief operating officer stepped down in the wake of the London Interbank Offered Rate (Libor) scandal… Read more
Eurozone crisis threatens global credit outlook: Fitch
A persistent low-growth environment combined with weak consumer demand and business investment will negatively affect most corporate and U.S. public finance sectors, according to a Fitch Ratings report. Affected sectors include industrials, financial institutions, municipals and infrastructure.
In its analysis, Fitch Ratings considers possible credit rating implications under three alternative scenarios for the U.S. economy over the next five years, consistent with its through-the-cycle approach to ratings. The three scenarios are: 1) a gradual improvement in U.S. GDP growth, 2) persistent low growth U.S. GDP, and 3) an oil price shock ($150/barrel prices)… Read more
China's June official services PMI rises to 3-month high
China’s service industries' output grew at a faster pace in June on the back of improvement in the property market and new orders, an official survey showed.
The purchasing managers’ index (PMI) rose to a three-month high of 56.7 in June from 55.2 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing today. This was the best reading since a 10-month high of 58.0 recorded in March… Read more
Australia's central bank holds rates steady
The Reserve Bank of Australia (RBA) on Tuesday left its main policy rate unchanged after having slashed the same by three-quarter of a percentage point in the past two months.
Governor Glenn Stevens and his board left the overnight cash-rate target at a two-and-a-half-year low of 3.5%, the RBA said in a statement in Sydney. The RBA has cut the cash rate four times in the past eight months - by 25 basis points at successive meetings in November and December, by 50 bps on May 1 and by another 25 bps last month.
Australia has the highest borrowing costs among major developed nations… Read more
US manufacturing PMI shrinks in June
Manufacturing in the US unexpectedly shrank in June for the first time in three years, stoking worries about the health of the world's largest economy.
The ISM’s index fell to 49.7, worse than the most-pessimistic forecast, from 53.5 in May, ISM report showed… Read more
Barclays Chairman Agius resigns
After the Barclays interest rate rigging scandal came to light and pressure built on Chairman Marcus Agius to resign, he finally quit his six-year stint at the financial services firm on Monday.
Also, CEO Bob Diamond and three other executives have agreed to give up bonuses this year due to their “collective responsibility as leaders.”… Read more
New services
Union Bank signs MoU with NIOS
Union Bank of India announces signing of MoU for collection of fee with National Institute of Open Schooling (NIOS) on 4 July 2012. NIOS is having Head Office at Noida (UP) and having 16 regional centres and two regional sub-centres across the country having permanent staff strength of nearly 350 at head office and 150 at regional centres and sub-centres… Read more
ICICI Bank offers online PPF scheme
ICICI Bank has launched an online Public Provident Fund (PPF) account through which customers can access their PPF accounts online.
This is for the first time that customers can open a PPF account from a private player or private bank. Earlier, customers could open their PPF accounts only through the post office or State Bank of India (SBI). Investments made in PPF are exempt under Section 80C of Income Tax. PPF offers tax free interest rate of 8.8%. Previously, to open a PPF account customers had to visit either an SBI branch or post office in person. The service was offered offline… Read more
SBI launches eFile service for filing income tax returns
State Bank of India has launched a new facility for filing income tax returns, online. This service is currently available only to State Bank of India customers, at a discounted price.
For salaried individuals the fee starts as low as Rs. 150, inclusive of taxes, which can be paid by the customer through SBI internet banking or the State Bank debit card… Read more
Axis Bank and UAE Exchange launch instant money transfer
Axis Bank, the third largest private sector Bank in India and UAE Exchange and Financial Services Ltd. which provides inward money transfer services in India from Xpress Money, has launched Instant Money Transfer (IMT) for Cross Border Inward Remittances.
This will facilitate cross border inward remittances by NRIs using the money transfer capabilities of Xpress Money, a global money transfer brand… Read more
Federal Bank ties up with Samba Bank
Federal Bank has partnered with Samba, one of the big banks in Kingdom of Saudi Arabia (KSA), for disposal of “SpeedCash Now” remittance across the counters of all the 976 branches of Federal Bank spread across the country.
Under the arrangement, remittances received through Samba under “SpeedCash Now” can be encashed by the beneficiaries in cash from any of the Federal Bank branches up to Rs.50,000 per remittance… Read more
TaxSpanner launches Tax Back Offer
TaxSpanner has launched Tax Back Offer to accelerate the adoption of online return filing in India. From July 1 till July 28, one lucky ITR will be selected every week, and the selected person will get the entire income tax money back, which he/she has paid during FY2011-12. This is the first ever such initiative by any income tax e-filing company in India.
To participate in “The Tax Back Offer”, one needs to file his/her returns using TaxSpanner.com. Participants can use various options available on the website, including eFile by eMail and Salary eFile. The prize money will be equal to the tax paid by the winner in the FY2011-12, i.e. TDS, plus advance tax… Read more
SBI launches Business Debit Card for SME & business customers
For its SME and business customers, State Bank of India has launched State Bank Business Debit card, having an array of attractive features including cash deposit facility, option of setting up point of sale terminals, etc… Read more
Federal Bank introduces Special Home loan scheme for doctors, CAs
As a token of appreciation for the valuable services offered by Doctors and Chartered Accountants to the society, Federal Bank is honouring them on this Doctors & Chartered Accountants Day (July 1st) by launching an exclusive home loan campaign starting on 1st July. This is a month long programme where the Home loans are offered to Doctors and Chartered Accountants at special discounted rates starting at 10.48% and nil processing fees… Read more