Result : UTI Bank

The Bank reported 40.2% growth in Net Profit for the third quarter ended December 31, 2006 at Rs.184.6 crore as against Rs.131.7 crore for the same period last year. Other income was up 61.3% to Rs.279.7 crore from Rs.173.4 crore. The Net Interst Magin was at 3%. The cost of funds have gone up to 5.5% from 4.9%. The Net NPA fell to 0.68% from 0.95%. The capital adequacy ratio stood at 11.83%. The deposits grew 50% from Rs.34025 crore to Rs.50920 crore of which demand deposit constitute 37%. Advances grew 66% from Rs.19531 crore to Rs.32337 crore.

Result : HDFC Bank

The Bank reported 32% growth in Net Profit for the third quarter ended December 31, 2006 at Rs.295.6 crore as against Rs.224.4 crore for same period last year. Other income was up 26% at Rs.373.3 crore as against Rs.296.1 crore.

Bank of England raises interest rate by 25 basis points

The Bank of England (BoE) unexpectedly raised its benchmark interest rate by a quarter point, its third increase since August as policy makers said the inflation may rise further. The nine member Monetary Policy Committee increased the repurchase rate to a five year high of 5.25% on Thursday.

DCB offers retirment scheme for staff

Development Credit Bank (DCB) has announced an early retirement scheme (ERS) for junior employees. This scheme is applicable to those falling in the categories of senior assistant officers, assistant officers, assistants and the subordinate staff. The be eligible for this scheme, employees either need to be of 40 years of age or should have completed 10 years of service. Out of 2000 employees, around 285 staff currently qualify for this scheme.

RBI gets freedom to fix SLR

In what will give greater operational flexibility to the central bank in the conduct of the monetary policy, the Cabinet on thursday gave its approval to pormulgate an ordinance to amend the Banking Regulation Act 1949. This is expected to release more funds for the industry whose appetite for credit has strained the availability of loanable resources. The central bank will now have complete freedom in fixing the floor and ceiling levels of the statutory liquidity ratio (SLR). At present there is a 25% floor and a 40% ceiling stipulated in the act itself. What is SLR? Statutory Liquidity Ratio which is commanly called SLR is a mandate for banks that says they must keep a stipulated proportion of their total demand and time liabilities, meaning deposits, in the form of liquid assets like cash, gold and approved securities, mostly government securities. Investment in these securities amounts to mandated lending to the government, leaving that much less of the banks' deposits for lending to the commercial sector. At present this is 25%. Implication: Lowering the SLR means banks have more money to lend where they get better yield than SLR securities. Bond Market will weaken as Banks take less Government papers.