Facing a probe by Indian authorities into accounts held by Indians in Switzerland, global banking giant HSBC today said it is cooperating with the authorities. The bank also disclosed a number of other investigations in various countries for "alleged tax evasion, money laundering and unlawful cross-border banking solicitation" and said it is cooperating with the relevant authorities in each of the ongoing matters. "In February 2015, a public prosecutor in Switzerland commenced an investigation of HSBC Swiss Private Bank, and the Indian tax authority issued a summons and request for information to an HSBC company in India," the bank said in its interim report 2015. The public prosecutor's investigation in Switzerland was closed in June 2015, the bank said, while adding that "with respect to each of these ongoing matters, HSBC is cooperating with the relevant authorities". It said, "There are many factors that may affect the range of outcomes, and the resulting financial impact, of these investigations and reviews, which could be significant." A leaked list of over one lakh account holders in HSBC's Swiss banking unit, including 1,195 Indians, became public early this year, prompting authorities in India and many other countries to launch their investigations to ascertain whether these accounts had illicit money stashed abroad. Separately, the UK-based bank said it has also received "subpoenas and requests for information" from the US and other authorities including with respect to US-based clients of an HSBC company in India. This case relates to some NRIs facing investigation in the US for alleged violation of the American tax laws. On Swiss unit-related tax matters, HSBC said, "Various tax administration, regulatory and law enforcement authorities around the world, including in Belgium, France, Argentina and India, are conducting investigations and reviews of HSBC Swiss Private Bank in connection with allegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation." It further said that "in light of the recent media attention regarding these matters, it is possible that other tax administration, regulatory or law enforcement authorities will also initiate or enlarge similar investigations or regulatory proceedings. (PTI)
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IDBI Bank has launched its first self service Mini Branch Kiosk at its Cuffe Parade, Mumbai Branch.Kiosk will address the customer’s request of personalised cheque leaves dispensation and issue of Demand Draft & Pay Order on 24X7 basis. These Kiosks will also have the functionalities of ATM.IDBI Bank would be the first bank in the country to make available these services on 24X7 basis.B.K. Batra, DMD, indicated that the bank will install more such 24x7 banking facilities so that its customer can do banking at their own convenience and time.(BW Online Bureau)
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HSBC Holdings said its first-half profit climbed a better than expected 10 percent, driven by a strong performance in Hong Kong that comes as the bank considers moving its headquarters to the Asian financial hub. HSBC also announced on Monday the sale of its Brazil unit to Banco Bradesco SA, the country's second-biggest private-sector bank, for a higher than expected 17.6 billion reais ($5.2 billion), as HSBC seeks to cut underperforming businesses. Europe's biggest bank reported that pretax profits in the six months to the end of June were $13.6 billion, up from $12.3 billion a year earlier and well above analysts' average forecast of $12.5 billion according to a poll conducted by the bank. HSBC has become increasingly reliant on its former headquarters of Hong Kong for profits as its businesses in Europe, the United States and other emerging markets slow. The bank's improved profits were driven by an investing frenzy in Hong Kong among individual customers amid China's soaring markets earlier in the year, the bank said. "HSBC's wealth management revenues in Hong Kong from equities, mutual funds and asset management increased significantly," Chairman Douglas Flint said in the earnings statement. China's stock markets have been a boon for the lender, driving profits for the bank's broking business in Hong Kong via the Stock Connect trading link with Shanghai as mainland shares soared prior to their June crash. The market turmoil in recent weeks could mean a gloomier outlook for the second half for the bank, however, if investors' souring on Chinese stocks curbs their buying of shares and related investment products. "The bank's profits benefited from the boost from Stock Connect before the market turned, so I wouldn't extrapolate the same level of performance into the third quarter and beyond," said Ian Gordon, analyst at Investec Securities in London. Asia now accounts for two-thirds of HSBC's profits, and Chief Executive Stuart Gulliver has pinned the lender's fortunes on a 'pivot' to the region and its fast-growing economies. The bank is speeding up a cull of unprofitable units and countries by cutting almost 50,000 jobs - half of them from selling businesses in Brazil and Turkey. HSBC also said it had increased to $1.3 billion from $550 million the sum set aside to cover costs from various regulatory probes into banks' rigging of foreign exchange markets worldwide. The lender's shares were unchanged in Hong Kong on Monday early afternoon, against a 1 percent drop in the city's benchmark Hang Seng index. (Reuters)
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Will Reserve Bank of India (RBI) governor Raghuram Rajan spring a surprise by cutting the repo rate 25 basis points in its monetary policy review on Tuesday (04 August)? The last rate cut was announced on 02 June after two back-to-back inter-meeting rate cuts in January and March.A large section of economists maintain that the central bank may leave the repo rate unchanged at 7.25 per cent. However, a few expect a surprise from Rajan in the form of a 25-basis-point cut in the policy rate.A lower repo rate will bring down banks’ borrowing costs, which in turn, may prompt them to slash their “base rates”, the floor interest rate on which lending rates for final home, auto and corporate borrowers are fixed. It can lead to lower floating home loan rates, which move in tandem with base rates, and bring cheer to consumers, who have been paying large chunks of their income as EMIs towards repaying housing loans.Here are top seven reasons on why it's time for another rate cut 1) Consumer price inflation (CPI) accelerated to an eight-month high of 5.4 per cent in June. But going ahead, the base effects will come in play, and at least till August, retail inflation will remain low, below 5%, creating space for RBI to cut its policy rate. Incidentally, wholesale price inflation (WPI) has been in negative territory for seven months in a row. In June, it was at minus 2.4 per cent.Chief economic adviser Arvind Subramanian has said focusing on retail inflation may not be the right thing to do at a time price indicators are pointing in different directions.2) The corporate sector asserts that tepid industrial production numbers and the continuous fall in wholesale prices merit a repo rate cut. The WPI is in the negative territory for seven months. Many believe that this shows the loss of pricing power in the manufacturing sector and the central bank should not only focus on the CPI. A lower rate will help prop up growth in Asia’s third largest economy—at least, that’s the popular belief.3) Poor demand also took a toll on corporate profits in the second quarter. So, circumstantially speaking, there is a case for a rate cut. Corporate profits are hurting. An analysis of 70 companies with a market capitalisation of at least $100 million showed net income fell by 5 percent in April-June, the second consecutive quarterly decline, according to Thomson Reuters data.4) So far, the monsoon rainfall in the country has turned out to be better than the forecast made by the India Meteorological Department (IMD) in early June. The monsoon’s revival from mid-July has boosted rice and soybean crops, curbing food price gains and easing concerns of shortages.Good rainfall this year is key to boosting a rural economy hit by delayed and lower rains last year, as well as keeping a lid on food inflation and giving India's central bank more scope to cut lending rates.5) Another area where the RBI governor can take comfort is a decline in global crude oil prices. Currently, the Brent crude oil prices are trading $54 per barrel compared to $65 a barrel in early June. This will ease pressure on inflation as well.6) In the current economic scenario, a repo rate (the rate at which banks borrow from the RBI) cut and government spending are likely to revive corporate investments in the infrastructure space and is likely to trigger credit pick-up. It is further expected to come as a booster for capital-intensive sectors that have been deferring investments due to high costs and low capacity utilisation.7) Finally, the uncertainties surrounding the timing of the proposed rate hike by the US Federal Reserve (Fed) still loom large and, hence, RBI should pare its policy rate now as the Indian central bank may find it difficult to do so when the Fed bites the bullet. Many believe this could happen as early as September, writes Tamal Bandyopadhyay in the Mint.
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The Hong Kong central bank said on Friday (31 July) it has fined State Bank of India's Hong Kong branch HK$7.5 million ($1 million) for breaching the city's anti money-laundering and counter terrorism financing rules. The fine marks the first time the Hong Kong Monetary Authority (HKMA) has taken disciplinary action under Hong Kong's Anti Money-Laundering Ordinance brought into force in 2012. The HKMA said between April 2012 and November 2013 State Bank of India (SBI) Hong Kong failed to perform a series of key anti money-laundering checks, including doing due diligence on 28 corporate customers, monitoring existing business relationships, and verifying whether its customers were politically exposed persons. Besides paying the fine, the bank must also submit an independent report to the HKMA, which is Hong Kong's banking regulator, outlining the remedial action it will take to tackle these internal control failings, it said. "It is important to note that neither the HKMA nor the external consultants found any instances of problem accounts or suspicious transactions during the period in question, or the years following," SBI said in a statement. "We fully support the HKMA’s efforts to ensure high standards of due diligence and monitoring among Hong Kong’s financial institutions. As noted by the HKMA, we have undertaken very positive and intensive remediation work to address their findings, which refer to procedures and policies in place during 2012 and 2013.” The HKMA has stepped up efforts to crack down on money laundering in recent years following fears raised by international regulators that the city's controls were not strong enough.(Reuters)
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ICICI Bank Ltd, India's biggest private sector lender by assets, reported a marginally better-than-expected 12 per cent rise in quarterly profit and said its bad-loan ratio fell sequentially, sending its shares more than 5 per cent higher. Net profit rose to 29.76 billion rupees ($465 million) for its fiscal first quarter to June 30, from 26.55 billion rupees reported a year earlier, the lender, which is also listed in New York, said in a statement. Analysts on average had expected ICICI Bank to report a net profit of 29.2 billion rupees, according to data compiled by Thomson Reuters. Gross bad loans as a percentage of total loans fell to 3.68 per cent from 3.78 per cent in the March quarter although they were higher than the 3.05 per cent reported a year earlier. Indian banks have seen their bad loans almost double in the past three years as a weak economy limited companies' ability to service debt. While the dominant state-run lenders account for the majority of the bad loans, private sector lenders like ICICI have also seen their troubled loans rise. Brokerage Ambit said this week it expected the pressure on ICICI's asset quality to continue with fresh addition of bad loans and increased slippages from restructured loans. ICICI's first-quarter net interest income grew 14 percent over a year earlier, while non-interest income rose 5 percent . Net interest margin rose to 3.54 per cent from 3.4 per cent a year earlier. Retail loans grew 25 per cent, faster than the 15 percent increase in overall credit. Shares in ICICI Bank were trading 5.8 per cent higher by 12:35 IST GMT in a Mumbai market that gained 1.26 per cent. The stock has underperformed the bank Nifty and the Nifty this year.
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Kotak Mahindra Bank, India's fourth-biggest private sector lender by assets, expects its credit costs to jump this fiscal year as it makes more provisions related to its purchase of smaller local rival ING Vysya Bank, it said on Thursday. Kotak Mahindra agreed in November to buy ING Vysya for $2.4 billion in what was the country's biggest bank takeover. The operations were combined effective April 1. Kotak Mahindra's credit costs will be about 80 basis points for the fiscal year to March 2016, compared with 30 basis points last year, Managing Director Uday Kotak said after the lender reported a 56 percent decline in its first-quarter profit. "A significant amount of provisioning requirements of the combined company are behind us. Going forward, for the rest of three quarter between July and March, we expect incremental credit cost of about 0.50 per cent on the combined balance sheet," Kotak said. Provisions including for bad loans and employee retirement benefits jumped 22 times from a year earlier, dragging down Kotak Mahindra's net profit to 1.89 billion rupees ($29.52 million) for the three months to June 30, from 4.29 billion rupees a year earlier. The lender had taken "some of the tougher calls" on provisioning which will continue for the rest of this fiscal year, billionaire Kotak told a news conference, adding he saw credit costs coming down to a "normalised" level from next year. "This merger is extremely value accretive and we see significant benefits flowing through as we go into future," Kotak said. Gross bad loans as a percentage of total loans rose to 2.31 percent in the June quarter compared with 1.85 percent in the March quarter. Provisions totalled 3.05 billion rupees. Kotak Mahindra has moved the stressed loans that came to it through the ING Vysya acquisition to an internal "bad bank" and is focusing on recovery, Dipak Gupta, a joint managing director at the lender said. (Agencies)
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India's second-biggest state-run lender by assets Bank of Baroda forecast growth in troubled loans to slow in the coming quarters due to its moves to curb risk, as it posted a quarterly profit that beat estimates and sent its shares soaring.The bank, however, cautioned that the bad-loans pain was not entirely over, with some its peers such as Bank of India, the third-biggest state-run lender, reporting a spike in its bad loans for its fiscal first quarter.Mumbai-based Bank of Baroda reported on Thursday a net profit of Rs 10.52 billion ($164.50 million) for the three months to June 30 that was about 23 per cent lower than the year-ago quarter but higher than analysts' average estimate of Rs 9.29 billion.Even as its gross bad loans as a percentage of total loans rose to 4.13 per cent from 3.72 per cent in the previous quarter, Bank of Baroda said the additions to bad loans during the quarter had been lower than its initial expectations."I would love to say that we have seen the worst of the NPAs (non-performing assets) and the restructured and the stressed assets," Bank of Baroda Chief Executive Ranjan Dhawan told a news conference."But I am conscious of the fact that other banks have also declared very high levels of stressed assets. So I feel that the pain is not entirely over," he said.Kotak Securities analyst Saday Sinha said Bank of Baroda's stressed loans at 8.2 per cent were lower than its peers and called it a "positive".Indian banks' bad-loan ratio has almost doubled in the past three years amid weak economic growth that limited companies' ability to service debt. State-run lenders, who dominate India's banking sector, account for majority of the sour debt.Bank of Baroda is lending selectively to companies and is instead expanding faster in retail loans, Dhawan said. The bank is staying away from commodities, particularly steel, he said. Steelmakers have been hit by weak prices and surging imports from China."We are very very choosy, we hardly take any steel account," Dhawan said, adding other sectors the bank was "careful" about lending to included textiles, infrastructure and real estate.Bank of Baroda shares were up 9.5 per cent on Thursday afternoon, after rising as much as 10.5 per cent.($1 = Rs 63.9500)(Reuters)
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Yes bank on Wednesday (29 July) said that its net profit grew 27.7 per cent to Rs 551.20 crore for the quarter ended June 30, 2015, on higher net interest income. Bank’s net profit during the April-June quarter of the previous fiscal was Rs 431.54 crore. Its net interest margin (NIM), the key gauge of profitability, expanded to 3.3 per cent in the first quarter of the current fiscal, from 3 per cent in the year-ago period, Yes Bank said in a filing on BSE. Net interest income of the bank rose by 42.2 per cent, year-on-year, to Rs 1,059.80 crore, it said. Total income also increased to Rs 3,797.02 crore in the first quarter of 2015-16 as against Rs 3,093.19 crore in the same period of previous fiscal. However, bank’s asset quality slipped during the period under review, with gross Non-Performing Assets (NPAs) rising to 0.46 per cent of the gross advances as against 0.33 per cent a year ago. Similarly, net NPAs or bad loans also inched up to 0.13 per cent, from 0.07 per cent of net advances. Yes Bank’s total advances grew by 35.1 per cent to Rs 79,665.60 crore and total deposits grew by 25.2 per cent to Rs 95,315.90 crore as on June 30, 2015. “Yes Bank…has posted another satisfactory quarter of consistent results, which is reflected in strong loan growth, NIM expansion and continued resilience in asset quality,” said Rana Kapoor, Managing Director and CEO Yes Bank.The RBI approval for setting up IFSC unit in GIFT city in Gujarat will significantly enhance Yes Bank’s international banking product offerings for the Bank’s corporate clientele while enabling long term foreign currency fund raising for the bank at competitive rates, he said. “Also, RBI’s recent approval for the Bank to act as primary dealer will further complete our product suite in becoming a complete Rupee Debt House,” Kapoor added. Yes Bank stock was up 2.59 per cent at Rs 815.25 on the BSE after it declared results for the first quarter.(PTI)
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Reserve Bank of India (RBI) Deputy Governor S.S. Mundra said the latest April-June earnings from state-owned lenders showed "stability" in terms of non-performing assets (NPAs), but added the central bank would remain "watchful." India's banking sector, dominated by more than two-dozen state-run lenders, has been hobbled by its highest bad-loan ratio in a decade as slower economic expansion hurt companies' abilities to service debt. "I think the results which have come, on the NPA front, there looks like some kind of stability now," Mundra told Reuters on the sidelines of a conference on Wednesday. "It is not back to the absolutely normal position," he added. "It would need a constant watch from us."(PTI)
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