Classroom

Payment by cards ? Exercise Caution !!!!!!!!!!!!!!! There are many technologically innovative products, services and delivery channels being launched and widely made use of in the banking domain. One of these options being marketed extensively is the various multi-utility branded cards which includes the credit and the debit cards. These co-branded cards apart from being used in the ATMs are also used at POS terminals (point of sale). The next time you decide to use your credit card on a shopping trip, think again. There was a news item that appeared in the Times News Network recently titled " 4 held for siphoning off plastic cash". The Mumbai police have busted a hi-tech credit card fraud which could be the crime of the future. Four gadget savvy youngsters, two of them software engineers, got together to earn some quick bucks and ended up siphoning over Rs.3 lakh. According to the police, the mastermind of the gang was a 19 year old who realised that if credit cards were swiped though a portable magnetic card reader, the personal data of the customer stored on it could be accessed. He then teamed with another 19 year old, and ordered the card reader from USA, through the internet, since the same was not available in India. These boys befriended a waiter at a hotel to take their plan ahead, Every time someone paid by credit card for food in that hotel, the waiter would discreetly swipe it through the magnetic card reader, which is no more than 6-inches long and can be stored in the pocket. Once the job is done, the waiter would hand over the device to the fellow fraudsters who would download the data from the cards onto a personal computer. The duo would then feed the data into blank cards, available in the grey market making them ready for use in shopping malls or to withdraw money from ATMs. Portable magnetic card reader can store data from about a dozen cards which are swiped through it. What care do the ordinary card users need to take in this regard? The best thing that could be done is to ensure that the cards are swiped in the cardholder's presence. This can be ensured in most of the POS payments like shopping malls, automobile fuel stations etc. However, it could be difficult in the payment of hotel food bills where the practice generally followed is that the cards are handed over for swiping to the waiters along with the bills and received back along with the payment slip for signature. Probably the best thing to do in this case is to exercise prudence and hand over the cards for payment only at the cash counter/card swiping activity is visible. Yet another check would be that since most of the credit card liabilities statements are availabel online in the repective websites, periodic checks on the transactions posted would give an assurance that no unauthorized transactions are raised in the accounts. Needless to mention, the purpose of this article is not to instill any undue fear in the usage of the cards but to convey to you to exercise caution and prudence while transacting with cards.

News

IndusInd Bank launches "Indus Gold Debit Card" IndusInd Bank has launched "Indus GOLD Debit card " in association with VISA at an annual fee of Rs.350 plus service tax. The card has a daily withdrawal limit upto Rs.50,000 from the ATMs, said a press release from the bank. It has a daily POS (point of sale) limit of Rs.1 lakh, personal accident insurance of Rs.1 lakh and lost card liability up to Rs.1 lakh. The customers will receive free transactions on any VISA ATMs in India and mobile alerts on every transaction.

Result Update

Bank of India The bank has reported 61% jump in its net profit to Rs.212.13 crore for the quarter ended September 2006 as against Rs.132.18 crore for same period last fiscal. The net NPA is brought down to 1.07% from 2.25%. The total deposits moved up 20% to Rs.1,03,293 crore from Rs.85,856 crore. Advances grew 24% to Rs.75,097 crore from Rs.60,614 crore. The low cost deposits (Current and Savings) constitute 40.4% of aggregate deposits. The capital adequacy ratio stands at 11.85%.

Bank Stock News

Development Credit Bank (DCB) lists with bang The bank which came out with IPO recently got listed on Friday. Although most brokerage houses and papers gave "avoid" rating to IPO, it listed with a bang. The stock, which was issued at a price of Rs.26, quickly climbed up after the opening bell to an intraday high of Rs.48.7 and eventually closed the day at Rs.47.5, a gain of 82.5%. The stock raked up a first day trading turnover of Rs.368 crore and a total of 8.19 crore shares changed hands.

Result Update

Andhra Bank The bank has reported a net profit of Rs.146.44 crore for the quarter ended September 2006, a growth of 10.19% compared to Rs.132.89 crore for same period last year. The gross NPA is reduced to 1.76% from 2.27%. The Net NPA is reduced to 0.10% from 0.26%. The total Business stood a Rs.56,113 crore registering a growth of 14.47% from Rs.49,021 crore in the corresponding quarter of previous fiscal. The advances improved by 23.22% to Rs.23,600 crore while deposits improved by 8.85% to Rs.32,513 crore. Explaining the slowdown in deposits growth, the bank said it has discouraged bulk deposits and focussed more on retail deposits to reduce cost of deposits and improve net interest margin. Corporation Bank The bank reported a net profit of Rs.127.01 crore for the second quarter of this fiscal reporting a growth of 20% compared to Rs.105.6 crore over same quarter of last fiscal. While the gross NPA stood at 2.16% the net NPA stood at 0.48% at the quarter end. The capital adequacy ratio stood at 13.32%. The total business rose to Rs.66,022 crore registering a growth of 32% compared to same quarter last fiscal. While deposits increased 27.74% to Rs.38,017 crore advances increased 38.46% to Rs.28,004 crore. The share of low cost deposits (Current and Savings Bank) account for 32% of total deposits.

Result Update

Federal Bank The net profit of Federal Bank has grown by 28 % to Rs.69.46 crore for the second quarter of current year as against Rs.54.16 crore for same period last year. While gross NPA is down to 4.13% as against 5.97%, Net NPA is down to 0.67% as against 1.60%. The capital adequacy ratio stands at 12.80%. The total business grew by 21.71% to Rs.31,002 crore. Deposits grew 14.5% to Rs.18,288 crore and advances grew to Rs.12,714 crore. The above results does not include the results of Ganesh Bank of kurundwad which Federal Bank took over recently. ICICI Bank The bank has reported a 30% rise in net profit at Rs.755.01 crore in second quarter against Rs.580.05 crore in the same period last year. The advances stood at Rs.1,55,403 crore at September 2006 as against Rs.1,07,070 as at September 2005. The deposits stood at Rs.1,89,499 crore at September 2006 as against Rs.1,20,452 as at September 2005. In the second quarter, the bank raised hybrid Tier I capital worth $340 million from international markets and Rs.800 crore from the domestic markets. It also picked up Rs.1,200 crore through issue of upper Tier II bonds in the local market. The average interest cost of the domestic Tier I capital is about 10% and that of upper Tier II capital is 9.25%. The Capital Adequacy ration of the bank is 14.34%.

News

UCO Bank to sell Reliance General Insurance Products Reliance General Insurance Company Ltd, a part of the Anil Dhirubhai Ambani Group, has entered into a tie-up with UCO Bank for selling personal accident insurance products through the bank's network across the country. Under the arrangement, UCO bank depositors would be covered under the personal accident insurance scheme at a one-shot premium of Rs.6.99 for rupees one lakh. The sum assured may go in multiple of rupees one lakh upto a maximum of rupees five lakh. Stan Chart 2-in-1 account The bank has relaunched its 2-in-1 accounts by offering an 8% per annum interest for 188 days, the best rate in the market in that tenure. This account comes with four free-cash withdrawal transactions at any visa ATM across India. The minimum value for the term deposit is Rs.1 lakh and an initial cheque of Rs.10,000 is required to fund the linked savings account. this special offer is open to customers only during the campaign period (September 18 to December 31) Indian Bank As part of bank's ongoing Centenary year celebrations, it has introduced Premium Current Account and the SB Platinum Account with Sweep facility. This revolutionary offer ensures that surplus amounts in your above account get invested in short term deposits, fixed deposits or reinvestment schemes to earn interest like any other term deposit. ¯ Auto sweep at Daily intervals;¯ In multiples of customers’ choice;¯ Choice of tenure upto One year Sweep facility is available in all the CBS branches across the country. Along with the Sweep facility, the customer will also get a host of free add-ons as under PREMIUM CURRENT ACCOUNT FREE ** ð Internet, Mobile & Phone Banking ð ATM-cum-Global Debit Card as eligible ð DDs/BPOs AT PAR upto Rs.3 lakhs ð Stop payment & attestations carriedout ð IndBank Bill Pay (Utility Bill payment)* SB PLATINUM FREE ** ð Life Insurance cover for Rs.1 lakh from LIC ð Personal Accident Insurance cover - Rs.1 lakh ð Internet, Mobile & Phone Banking ð ATM-cum-Global Debit Card ð DDs/BPOs AT PAR upto Rs.25000/- ð IndBank Bill Pay (Utility Bill payment)* ð Personalised Cheque Book * in select cities ** conditions apply. for further details you can contact nearby branch of the bank.

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Result Update

State Bank of Hyderabad

The bank has reported a net profit of Rs.128.76 crore during the second quarter of current fiscal ended September as against Rs.71.14 crore in the corresponding quarter of previous fiscal, a growth of 81.02 %. While the gross NPAs were brought down to 1.77%, net NPAs were reduced to 0.23%. The total business registered a growth of 25.02% and stood at Rs.63,850 crore. The deposits stood at Rs.39,789 crore while advances stood at Rs.24,063 crore.

News

Punjab National Bank - Medical cover for depositors The bank plans to offer a medical insurance cover from November to depositors for a lower price than market rate and has tied-up with private insurer, Reliance General Insurance, for the purpose. The facility will be optional for all kind of depositors and be issued by the bank to its 35 million depositors . The depositors can also go for medical insurance cover for their family members. RBI keen on Mobile Banking The Reserve Bank of India is testing the applicability of providing mobile banking facility to the customers of the banks. The experiments are currently on at the Institute for Development and Research in Banking Technology (IDRBT) on using mobile telephony technology for banking transaction. State Bank of Patiala starts Depository sevices The bank has started offering Depository services at select branches of the bank, which will enable its customers to open Demat accounts for keeping their shares in electronic forms. Bank Strike on 27 th October 2006 United Forum of Bank Unions has called for all India bank strike on October 27 to protest a whole range of issues including proposed mergers in the public sector banks, outsourcing of retail banking activities and attempts to privatise banks. They have also demanded the filling up of vacancies of about one lakh in PSBs as well as restoration of compassionate appointment. According to Mr.C.H.Venkatachalam, convenor, UFBU, the Chief Labour Commissioner (Central) held a conciliation meeting on October 18 at New Delhi between the unions and the Indian Banks Association. but the conciliation meeting failed to produce any results. He termed as retrograde the government move to merge 27 banks into four or five big banks. Mr.Venkatachalam said the capital of all the PSBs put together was only $3 billion or about 14,000 crore, whereas the capital of Citibank alone was $63 billion or about 3,00,000 crore. He said even merging all PSBs would not make them global in size. the total assets of all 27 PSBs in India are less than $300 billion, which are dwarfed in comparison to some of the big global banks. Asset Portfolio (in $ billion) Mizuho financial Group--------------------------1,285 Citibank-----------------------------------------1,264 UBS---------------------------------------------1,121 Credit Agricole Groups--------------------------1,105 HSBC--------------------------------------------1,034 Deutsche Bank-----------------------------------1,015 BNP Paribas--------------------------------------- 989 Mitubishi Tokyo------------------------------------975 Sumitomo Mitsui-----------------------------------950 Royal Bank of Scotland------------------------------806 State Bank of India-----------------------------------91 Punjab National Bank---------------------------------23 Canara Bank------------------------------------------22 Bank of Baroda----------------------------------------19 Bank of India------------------------------------------19 Central Bank of India----------------------------------14 Union Bank of India-----------------------------------13 Indian Overseas Bank---------------------------------11 Syndicate Bank---------------------------------------10

Happy Diwali

Wishing you and your family a very happy and prosparous Diwali

Result Update : United Bank of India

The Bank has recorded a net profit of Rs.162.08 crore for the first half of the current fiscal as against Rs.103.8 crore for same period last year. The deposits have grown by 16% from about Rs.26,000 crore to Rs.30,220 crore. Total advances increased from Rs.13,474 crore to Rs.18,622 crore. While the gross NPA stood at 4.37%, the net NPA stood at 2.44%. Result Update : Dena Bank The bank has recorded 41.34% raise in its net profit to Rs.68.75 crore for the quarter ended September 2006 as against Rs.48.64 crore over same quarter last year. The bank has made a major turnaround with the half year net profit being RS.87.24 crore as against a net loss of Rs.140.66 crore for the same period last year. Currently Net NPA stand at 2.89%. Result Update : State Bank of Bikaner and Jaipur The bank has reported a net profit of Rs.66.90 crore for the quarter ended September 2006 as against Rs.37.47 crore reported for same period last year. the capital adequacy ratio stood at 11.77%. While the gross NPA is at 2.35% the Net NPA stood at 1.12%. Result Update : Canara Bank Canara Bank has reported a net profit of Rs.361.77 crore for the second quarter of the current financial year 2006-07, up 18.41% from Rs.305.51 crore posted during the corresponding quarter of the previous fiscal. The total deposits stood at Rs.1,22,121 crore as at the end of the quarter. Centurion, LKB merger challenged A shareholder of Lord Krishna Bank of Wednesday approached the Kerala High Court challenging the decision taken at the AGM of the bank to merge it with Centurion Bank of Punjab. The petition was filed by Mr. Umesha Kumar Pai fo Ernakulam, who holds 200 equity shares of the bank. The petitioner sought a dircetion to the Central Government to appoint inspectors to investigate the affairs of the bank after making a declaration under Section 237 of the Companies Act that the affairs ot the bank should be investigated. He said that the most of the shareholders were prevented from participating in the AGM held on September 30. The meeting has hastily transacted all the eight items on the agenda, including the merger resolution, violating all the company laws. According to the petitioner, no discussion was allowed on the merger proposal and no independent Chairman was appointed as per the norms in the case of an amalgamation scheme approved by the High Court. (Business Line 20-10-2006) Cancellation of Banking licence: The Reserve Bank of India cancelled the licence of the Bharat Mercantile Co-operative Urban Bank, Hyderabad on October 17, as all efforts to revive the bank had failed. The RBI also requested the Registrar of Co-operative Societies, Andhra Pradesh, to issue an order for winding up of the bank and appoint a liquidator for the bank. The bank is now prohibited from carrying on business. Result Update : Kotak Mahindra Bank Ltd. The bank has reported net profit of Rs.34.8 crore for the quarter ended September 30, 2006 a growth of 12 % as on same quarter of previous year. The Advances of the bank grew 79% to Rs.8,386 crore. The Deposits were up 49% at Rs.8,194 crore. The Current and Savings accounts (CASA) deposits comprised 21 percent of total deposits. Result Update : IDBI Bank Ltd. The bank has shown marginal increase in net profit to Rs.139.40 crore for second quarter compared to Rs.131.84 crore reported for same quarter previous year. The Capital Adequacy Ratio has decreased to 14.66% from 16.3%. Although there is lagre decrease in Amount of Gross NPA from 2228 crore to 1332 crore, the Net NPA increased from 614 crore to 735 crore. The United Western Bank Limited has been amalgamated with the Bank wef October 3, 2006 as per the amalgamation scheme notified by Government of India. The above results do not include the results of United Western Bank Ltd. Result Update : Bank of Maharashtra The bank has shown 396% increase in Net Profit for the quarter ended September 30, 2006 at Rs.61.29 crore compared to Rs.12.35 crore for the same quarter of previous year. The Total Business stood at Rs.48,692 crore showing an increase of 19.76 %. The Deposits stood at Rs.29,493 crore showing a growth of 10.76%. The Advances stood at Rs.19,199 crore showing a growth of 36.82%. The Net NPA was reduced to 1.66% against 2.76%. The Capital Adequacy Ratio stood at 11.16%. Result Update : Union Bank of India Union Bank of India's net profit surged 218 % to Rs.194.16 crore during the second quarter ended September 30, form Rs.61.10 crore in the corresponding previous period. While Deposits grew 14.36 % for the quarter under review, advances went up 29.36%. The Capital Adequacy ratio stood at 10.79% and Net NPA was at 1.24%. Result Update : State Bank of Mysore The net profit of the bank surged to Rs.59.40 crore for the quarter ended September 30, as against Rs.51.52 crore at the end of corresponding period of previous year. Net NPA was brought down from 1.03% to 0.38%. The Capital Adequacy ratio stood at 11.13%. Result Update : Lakshmi Vilas Bank Ltd. The bank has reported 90% jump in its net profit for the quarter ended September 2006 at Rs.3.83 crore as against Rs.2.01 crore for the same period previous year. Deposits grew to Rs.4,844 crore from Rs.3,646 crore and Advances grew to Rs.3,463 crore from Rs.2,325 crore. The Capital Adequacy ratio stood at 10.15%. Canara Bank Cashback scheme Canara Bank has launched a cashback scheme for the festival season for its 2.5 million ATM-cum-debit card customers. The scheme, operational all over the country, will remain open during the period between October 15 and November 13. It offers cashback upto three percent of purchases up to a maximum of Rs.1,000. Result Update : ING Vysya Bank Ltd. The bank has reported a 110% increase in its net profit at Rs.41.39 crore for the second quarter of the current year 2006-07. However, during the period the bank also earned Rs.26.40 crore through divestment of its stake in the Bharat Overseas Bank in favour of Indian Overseas Bank. If this profit is netted off, the bank's net profit drops to Rs.15 crore for the second quarter. The Current account and Savings account (CASA) deposits in the bank's total deposits stood at 31% (Rs.3,936 crore) as at September 2006. Net NPA is reduced from 1.98% to 1.57%. Result Update: Vijaya Bank Vijaya Bank has reported a 36% increase in its net profit at Rs.102.33 crore for the second quarter of the current financial year 2006-07 and has declared 10% interim dividend. The Deposits of the bank stood at Rs.25,938 crore registering a growth of 23.2% over corresponding period last year. Result Update : The Bank of Rajasthan Ltd. The bank has shown a net profit of Rs.55.24 crore for the quarter ended September 2006 as against Rs.5.24 crore over same period last year. The bank has shown 60.57 crore as other income which includes RS.36.54 crore being profit on sale of equity shares considered as long term capital asset. The total business stood at Rs.12,924 crore. The Capital adequacy ratio stood at 13.52%. The Net NPA stood at 0.76%.

Stock Recommendation: UTI Bank

Dalal Street Journal ( Diwali Buys) 16-29 Oct-2006

Here's a bank with increasing net interest margin (NIM), improving asset quality, well cushioned investment portfolio, consistant dividend payment history and better than industry average growth. UTI Bank is one such scrip which meets all the above parameters and becomes one of the scrips for our Muhurat buys. The growth of UTI Bank's business continues unabated. The current account and savings accout (CASA) ratio of the bank stands at 40 percent of the total deposits, NIM has improved consistently in each of the quarters in FY06 and even the fee-based income continues to be strong. The asset quality in on an uptrend due to the lower incremental defaults and the bottomline growth has been strong. At the CMP of Rs.410, UTI Bank is trading at P/E of 17.88x of FY07E earnings as compared to 20.32x of ICICI Bank, 23.98x of Kotak Mahindra Bank and 26.70x of HDFC Bank, which makes the scrip more attractive. We also think the UTI Bank could become a prime acquisition target for the foreign banks and expect the counter to trade at a higher premium going forward.

The major growth is expected from the increased branch network. UTI Bank has a pan-India presence with 367 branches, 95 extension counters and 2,000 ATM ( which is the third largest ATM network among banks in India). The bank is planning to roll out 100 more branches in FY07 and most of these branches will be set up un rural areas, which will result in higher retail banking business and increased share of the low-cost CASA deposits. The bank expects the share of these low cost deposits to increase to 42 percent in FY07E.

For Q1FY07, the deposits stood at Rs.42,094 crore while advances stood at Rs.25,836 crores. The important fact is that the retail advances constituted 30 percent of the total advances. We expect the share of retail loans to touch 32 percent by the end of FY07. Clearly indicating that the bank is focussing more on high-yielding retail assets. The net interest margin of the bank has shown consistent improvement in the past and stands at 2.68 percent. With improvement in yield on advances and increasing CASA deposits, the NIM of the bank is expected to improve to 2.90 percent at the end of FY07. The fee-based income of the bank is also expected to increase with opening of new branches and tie-ups with the MFs. This income will give the much needed stability to the bank"s overall profitability by reducing its dependence on the highly volatile treasury income. The asset quality of the bank has improved consistently and the net NPAs stand at 0.73 percent . According to the management, the net NPA level is expected around 0.60 percent at the end of FY07. Hence, with all these positive factors, we recommend the investors to buy the scrip with a minimum on one years perspective.

Punjab National Bank's Doorstep banking:

The Bank has launched doorstep banking through vans in North Delhi. The areas covered under the facility are Azadpur, Gujranwala Town and Model Town. The van will be stationed at three venues in two shifts - morning and afternoon, for duration of 20 to 40 minutes at each venue. Customers can make select transactions and requests for banking activities. Initially, only cash less service will be offered through the doorstep banking van.

Result Update : Punjab & Sind Bank

Net profit of bank rose 102% to Rs.72.93 crore for the second quarter ended September 30, 2006 against Rs.36.08 crore over the same period last year. The deposits grew by 35.44% to Rs.19,372 crore and advances grew by 55.28% to Rs.7,255 crore from Sept. 05 to Sept. 06. The net NPA stood at 1.81 % at Sept. 06.

Result Update : Centurion Bank of Punjab Ltd.

Net profit of CBoP rose 49% to Rs.31.13 crore for the second quarter ended September 30, 2006 against Rs.20.9 crore over the same period last year. The bank's net NPA stood at 1.3%. The deposits stood at Rs.11,383 crore against Rs.8,071 crore and advances stood at Rs.8,385 crore against Rs.5,113 crore.

Result Update : South Indian Bank Ltd.

Net profit of SIB for the quarter ended September 30, 2006 has grown by 383% to Rs.41.65 crore compared to Rs.8.63 crore over the same period last year. The gross NPA has come down to 5% and net NPA has come down to 1.69%. The Capital Adequacy Ratio has gone up to 11.50%. The total business grew 28 % to Rs.18,224 crore.

Result Update : HDFC Bank

Net profit of HDFC Bank rose 31.7 % to Rs.262.94 crore for the second quarter ended September 30,2006 against Rs.199.64 crore over the same period last year. Total deposits stood at Rs.63,447 crore (39.6% growth) and Total advances stood at Rs.49,326 crore (34.2% growth) for Q2. The Net Interest Margin was maintained at 4% which is highest in the industry. The Capital Adequacy Ratio was at 12.1%. The share of low cost deposit stood at 52% of total deposit base

Union Bank of India to sell gold coins:

Joining the bandwagon of banks selling gold coins and bars, Union Bank of India has also launched sale of gold coins of 5gm, 8gm and 10gm weight having 99.99 purity at select branches all over India.

Bank of Rajasthan hikes deposit rates:

With effect from October 6, 2006 the bank has hiked the rate of interest on deposits for the following periods; Deposit for 61 to 90 days - 5.75% , Deposit for 1 year to less than 2 years -8.25%, Deposit for 5 years and above - 8.50%, Interest on its tax savings deposits will be 8.50%.