Tag: canara bank

Punjab National Bank to divest stake in Canara HSBC OBC Life Insurance, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Punjab National Bank (PNB) will divest its stake in Canara HSBC OBC Life Insurance Co, the lender said on Saturday.

The city-headquartered state-owned bank had acquired a stake in the life insurer post amalgamation of the erstwhile Oriental Bank of Commerce (OBC) into itself last fiscal year.

“The bank intends to divest its stake in Canara HSBC OBC Life Insurance Co. Ltd, an associate of the bank, at an appropriate time depending upon market conditions and available options,” PNB said in a regulatory filing.

The erstwhile OBC held 23 per cent stake in the life insurer, which by virtue of amalgamation has come to PNB.

Canara Bank owns 51 per cent stake, while HSBC Insurance (Asia Pacific) Holdings Ltd as a foreign partner owns 26 per cent.

PNB, however, has not disclosed how much stake it will dilute in Canara HSBC OBC Life Insurance.

It is also a promoter of another insurer PNB Metlife Insurance, owning the highest stake of 30 per cent. The company was set up in 2001, in which other shareholders include US-based Metlife with 26 per cent, Elpro (21 per cent) and M Pallonji & Company (18 per cent).

As per extant insurance guidelines of Insurance Regulatory and Development Authority of India (Irdai), one promoter cannot hold more than 10 per cent stake in two insurance ventures.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Canara Bank appoints Brij Mohan Sharma as Executive Director, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Brij Mohan Sharma, Executive Director, Canara Bank

Canara Bank has appointed Brij Mohan Sharma as the new Executive Director.

Brij Mohan Sharma is a B. Com Graduate (Gold Medalist), M. Com (Business Admin, Medalist), and CAIIB.

He joined Oriental Bank of Commerce in 1983 and has risen to the level of Chief General Manager in Punjab National Bank. During his 37 Years of long banking career, he has worked in various capacities. He was the Regional head of Pune and Bhopal. He was also Cluster Monitoring Head, Branch Business, Western India, and Vertical Head of Inspection and Control.

He has rich experience in all Segments of Banking including Branch Banking, Corporate Credit, Retail Credit, Inspection and Audit Division, etc.

He has taken charge as Executive Director of Canara Bank on 19.05.2021.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Bad bank to kick off with 80 NPAs worth Rs 2 lakh crore, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Banks are likely to transfer about 80 large NPA accounts for the resolution to National Asset Recons­tru­ct­ion Com­pany (NARCL), which is expected to be operational by next month.

NARCL is the name coined for the bad bank announced in the Budget 2021-22. A bad bank refers to a financial institution that takes over the bad assets of lenders and undertakes resolution.

Finance Minister Nirmala Sitharaman in the Budget 2021-22 announced that the high level of provisioning by public sector banks of their stressed assets calls for measures to clean up the bank books. “An Asset Recon­struction Company Limited and Asset Management Com­pany would be set up to consolidate and take over the existing stressed debt,” she had said in the Budget speech.

Last year, the Indian Banks’ Association (IBA) had made a proposal for the creation of a bad bank for swift resolution of non-performing assets (NPAs). The government accepted the proposal and decided to go for ARC and asset management company (AMC) model for this.

The process

The size of each of these NPAs accounts is over Rs 500 crore and the banks have identified about 70-80 such accounts to be transferred to the proposed bad bank, sources said. It is expected that NPAs over Rs 2 lakh crore will move out of the books of the banks to the bad bank.

The company will pick up those assets that are 100 per cent provided for by the lenders. It will then manage and dispose of the assets to alternate investment funds and other potential investors for eventual value realisation.

NARCL will pay up to 15 per cent of the agreed value for the loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

The government guarantee would be invoked if there is a loss against the threshold value.

The loans identified by the Indian Banks’ Association include NPAs in a variety of industries — including oil, steel, cement and roads, with many admitted under the insolvency process. These loans are almost fully provided for over the years and they exclude the ones where there is fraud involved or those currently under liquidation. About 75% of the lenders by value need to approve to transfer the loans to an ARC.

No fraud loans

The Reserve Bank of India (RBI) has said that loans classified as fraud cannot be sold to NARCL. As per the annual report of the RBI, about 1.9 lakh crore of loans have been classified as fraud as of March 2020.

To facilitate the smooth functioning of asset reconstruction companies, the RBI last month decided to set up a panel to undertake a comprehensive review of the working of such institutions.

After enactment of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act in 2002, regulatory guidelines for ARCs were issued in 2003 to enable the development of this sector and to facilitate the smooth functioning of these companies.

Since then, while ARCs have grown in number and size, their potential for resolving stressed assets is yet to be realised fully.

The bad bank

Nine banks and two non-bank lenders, including the State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB), are coming together to jointly invest Rs 7,000 crore of initial capital in a proposed bad bank that aims to help extract funds stuck in bad loans. Two other state-run financiers of power projects will also own stock in the bad bank.

Canara Bank, Union Bank of India and Bank of India will join their larger state-run peers as investors in the bad bank. ICICI Bank, Axis Bank and Life Insurance Corp of India-owned IDBI Bank are also among the shareholders. State-owned Power Finance Corp and Rural Electrification Corp will also be equal shareholders in the new company.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Canara Bank posts ₹1,065-cr Q4 profit; total income grows 55%

Banking & Finance

[ad_1]

Read More/Less


Canara Bank, backed by growth in CASA, small deposits, retail and housing advances, has posted a profit of ₹ 1,065.09 crore for fourth-quarter (Q4) of 2020-21 on consolidated basis as against a loss of ₹3,208.31 crore posted in the same period last year.

The bank’s total income grew by 55.53 per cent at ₹23,774.15 crore as against ₹15,285.27 crore recorded last year. Provisions and contingencies for the quarter reduced by 22.85 percent at ₹4,135.51 crore as against ₹5,360.47 crore in the same period last year.

The bank has disclosed that the figures of quarter ended March 31, 2020 and year ended March 31, 2020 are related to consolidated Canara Bank financials of pre-amalgamation period, hence not comparable with post-amalgamation financials for the quarter ended March 31, 2021 and year ended March 31, 2021.

L V Prabhakar, bank’s MD& CEO, commenting on Q4 performance said: “We have strengthened the balance sheet by making aggressive provisions and importance given to recovery. A lot of emphasis was given during the last financial year and have identified over 2 lakh accounts to be brought under the OTS. On the operations front, the bank has seen growth of 14 percent in CASA deposits, 16 percent in small deposits. Bulk deposits we discouraged and it saw a degrowth of 2.6 percent. On retail advances, retail advances saw 12 percent growth, retail housing 15 percent, vehicle advances 13 percent and agriculture 17 percent.”

Also read: Why Canara Robeco Equity Hybrid Fund is a good investment

“For medical sector financing, the bank has set aside ₹4,000- 4,500 crore. We are planning to finance distressed assets and already have identified hospitals and companies in the medical sector who require funds,” he added.

Segment revenues

Treasury ₹5,120.82 (last year ₹ 3,387.12 crore), Retail banking ₹ 8,677.34 crore (₹ 5,690.92 crore), wholesale banking ₹ 7,706.45 crore (₹ 5,105.16 crore) and life insurance ₹ 2,269.54 crore (₹ 1,006.86 crore).

Asset Quality

Bank’s net-interest income (NII) grew by 9.87 percent to ₹5,589 crore. While non-interest income increased by 72.08 per cent to ₹ 5,207 crore. Bank’s gross NPA stood at ₹ 60,397.80 crore (last year’s ₹ 37,250.53 crore), Net NPA stood at ₹ 24,455.07 crore (₹ 18,287.72 crore). Percentage of gross NPA stood at 8.94 percent (8.24 percent). Percentage of net NPA stood at 3.82 percent (4.23 percent). Return on assets annualised is 0.42 percent (negative 1.78 per cent).

Deposits/Advances

Bank’s global business increased by 8.23 percent to ₹ 16,86,030 crore as at March 31, 2021 with global deposits at ₹ 10,10,875 crore and global advance (gross) at ₹ 6,75,155 crore. Domestic deposit stood at ₹ 9,63,306 crore, with growth of 10.74 percent (y-o-y).

Domestic advances (gross) stood at ₹ 6,52,558 crore with growth of 5.51 percent (y-o-y).

CRAR of the bank stood at 13.18 percent as at March 31, 2021. Out of which Tier-I is 10.08 percent and Tier-II is 3.10 percent. Bank successfully raised capital during FY21 through: AT-1 Bonds: Rs 2,936.10 crore and QIP Equity: Rs 2,000 crore

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Power finance companies likely to be promoters of the bad bank, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


The National Asset Reconstruction Company (NARC), or the bad bank, is likely to be promoted by Power Finance Corporation and Rural Electrification Corporation.

While all major public sector banks will invest in the NARC, they will be holding a stake of below 10%. The power finance companies will hold more than 10%

The Reserve Bank of India is reluctant to allow banks to float another ARC to which they will sell their bad loans.

Padmakumar M Nair, Chief General Manager of Stressed Assets Resolution Group at SBI, will head the National Asset Reconstruction Company Ltd, the proposed bad bank for taking over stressed assets of lenders.

Nair has been picked up for the CEO post of the proposed bad bank NARCL as he has a long exposure of handling resolution of stressed assets. He will be joining the company on a deputation basis for the moment. Finance Minister Nirmala Sitharaman in the budget for 2021-22 had announced that an asset reconstruction company or a bad bank would be set up to consolidate and take over existing stressed assets of lenders and undertake their resolution. A bad bank refers to a financial institution that takes over the bad assets of lenders and undertakes resolution.

Most of the large public sector banks in India have a stake in an existing ARC. SBI is the largest shareholder in Arcil with IDBI Bank, ICICI Bank and Punjab National Bank holding a significant stake. Another firm Asrec is owned by Indian Bank, Bank of India, Union Bank and LIC.

The bad bank

Nine banks and two non-bank lenders, including the State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB), are coming together to jointly invest Rs 7,000 crore of initial capital in a proposed bad bank that aims to help extract funds stuck in bad loans. Two other state-run financiers of power projects will also own stock in the bad bank.

Canara Bank, Union Bank of India and Bank of India will join their larger state-run peers as investors in the bad bank. ICICI Bank, Axis Bank and Life Insurance Corp of India-owned IDBI Bank are also among the shareholders. State-owned Power Finance Corp and Rural Electrification Corp will also be equal shareholders in the new company.

The asset transfer

The Indian Banks’ Association (IBA) has identified 102 corporate bad loans, totalling to Rs 2 lakh crore, where the amount outstanding in each is over Rs 500 crore that can be transferred to the proposed National Asset Reconstruction company (NARC) or bad bank.

It has asked its member banks asked members to identify large loans where they are lead bankers and get approval from co-lenders so that these loans can be sold to a National Asset Reconstruction company.

The loans identified by IBA include NPAs in a variety of industries — including oil, steel, cement and roads, with many admitted under the insolvency process. These loans are almost fully provided for over the years and they exclude the ones where there is fraud involved or those currently under liquidation. About 75% of the lenders by value need to approve to transfer the loans to an ARC.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Divestment hopefuls Bank of Maha, BoI, IOB shoot up on stock market charts, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Public sector banks Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India, which are reportedly on the privatisation shortlist have risen manifold during the year.

The rally in PSU banks has strengthened in the last few days despite the yo-yoing markets due to the coronavirus pandemic wave.

Bank of Maharashtra shares have nearly doubled from Rs 13.55 at the start of the year to Rs 25.40 per share. It was up 2.21% over the previous close on Wednesday.

From 10.80 at the start of the year, Indian Overseas Bank’s shares have risen over 52% to 16.45. The shares were up 3.13% over the previous close on Wednesday.

From Rs 50.35 a share in January start, the Bank of India share price has climbed to 72.70 on Wednesday. It was up 4.76% over the previous close.

From 14.10 in January, the share price of Central Bank of India has jumped to Rs 18.45 on Wednesday. It was up 7.89% over the previous close.

The top PSU banks including SBI, Bank of Baroda, Canara Bank and PNB are also outperforming over divestment hopes around PSU banks.

More upside seen

Traders see another 10-15% jump in PSB shares if the Nifty holds 14500 levels.

SBI is the top investment pick in case the Nifty holds 14,400, with others offering a good trading opportunity for greater upside on talks around divestment.

PNB, Canara Bank, Bank of Baroda and SBI, which hold 74.63 per cent weight in the Nifty PSU Bank, have rallied between 4 per cent and 17.5 per cent in April 20-May 11, driving the index up by 15.05 per cent to 2,239.7 over the same period. This beats the Bank Nifty’s 6 per cent rally through 32,953 over the comparative period.

On May 12, when the Nifty and Bank Nifty corrected by more than 1 per cent, the Nifty PSU Bank closed up 3.2 per cent, underscoring the buying in these counters.

Futures prices of these stocks along with aggregate open interest change signal the market interest in these counters.

Canara Bank active futures contract has risen 17.5 per cent through 151 between April 20 and May 11. Over this period, the aggregate open interest, which measures traders’ outstanding buy-sell positions, rose 11.25 per cent, implying bullish sentiment on the counter.

Bank of Baroda’s 17 per cent gain in futures was accompanied by an 11.3 per cent decline in aggregate OI, signalling that bears were covering their sell positions. Likewise, SBI active futures contract, which has risen 11 per cent in the relevant period, was accompanied by an 8 per cent decline in aggregate OI, implying short covering. PNB futures, which rose 4 per cent, saw aggregate OI jump 40 per cent, suggesting bullish build-up.

The status

Indian Overseas Bank and Central Bank are under the Reserve Bank of India‘s stringent prompt corrective action framework.

These banks have reported net non-performing assets (NPAs) below levels that trigger PCA. However, on the proforma net NPA front, Central Bank falls short as its NNPA is 6.58% against the 6% required to be out of PCA.

The Reserve Bank of India is likely to delay regularising struggling state-run lenders that are under the prompt corrective action (PCA) framework as it has reservations over their capital adequacy levels.

Two public sector banks and one general insurance company are expected to be disinvested this year in addition to the divestment of IDBI Bank, Finance Minister Nirmala Sitharaman had announced during Budget presentation in February.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Cannot afford lockdown, take precautions: Canara Bank ED

Banking & Finance

[ad_1]

Read More/Less


Karnataka’s annual credit plan (ACP) outlay has been increased by 35.78 percent at ₹4.96-lakh crore for financial year (FY) 2021-22, as compared with ₹3.65-lakh crore in FY 2020-21.

Total priority sector credit is fixed at ₹2.92-lakh crore, an increase of 14.24 percent over the previous year’s ₹2.55-lakh crore. Share of agriculture credit is fixed at ₹1.25 lakh crore, constituting 43.09 percent of total priority sector credit. Crop production credit is ₹71,923.31 crore comprising 57.09 percent of total agriculture credit. The share of MSME is ₹1.11-lakh crore, education loan is ₹5,969.86 crore, housing loan ₹30,164.89 crore and other sectors ₹9,498.22 crore.

Speaking after launching the State’s ACP 2021-22, Manimekhalai, Executive Director of Canara Bank said “ The country is on the verge of one more uncertainty but cannot afford one more lockdown, we have to be more careful, should take all precautionary measures and continue to observe all Covid protocols.”

“All stakeholders have to put in efforts for survival and revival of the economy,” she added.

Talking about providing immediate relief to the vulnerable and affected segments, Manimekhalai, said “Central government has come out with many schemes to rebuild economy with the help of State government, RBI and NABARD through schemes like agriculture infrastructure fund, coverage of 10,000 FPOs, formalisation of micro food processing enterprises (FME) with ODOP (One District One Product) concept etc.”

The State as a whole has achieved 80.62 percent of ACP under MSME, 77.97 percent under agriculture and 102.27 percent under total credit at the end of the third quarter of FY 2020-21.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Pay scale for bank CGMs made almost equal to EDs, executives say its against natural justice, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Pay hikes, especially steep ones, should make executives smile, but not so in the case of public sector banks. A recent government note allowing banks to raise pay scales for chief general managers by as much as 62% has not gone down well with a section of bank executives.

This makes their remuneration almost at par with that of executive directors. The new pay scale structure, several top bank executives say, is against principles of natural justice.

The new pay scale for bank CGMs has been fixed at Rs 166350-183950 from Rs 103,000-113900 and this would be effective retrospectively from the date when they assumed charge in their respective banks, the Department of Financial Services said in a letter to chief executives of nationalised banks. This is in line with CGM pay scale in State Bank of India, the DFS note said.

ET has reviewed the DFS letter, dated April 1, 2021.

Pay scale for executive directors has been Rs 176800-224000, which was last revised in December 2016.

Bank managing directors and EDs draw salary following the 7th national pay commission recommendation while CGMs’ salary hike followed the latest bipartite wage settlement like other bank employees.

However, as CGM positions in banks are created with board approval, the revision in their pay scale, allowances and other terms and conditions require government’s approval.

“At present the issue has created a lot of heat among top bank executives. Some more clarity is needed on the matter,” an executive director with a mid-sized bank said. “If the issue is not addressed, there may not be any incentive for people to apply for ED positions,” the person said. Several other senior executives with public sector banks corroborated his views.

“The anguish among bank executives is not surprising. Responsibility of an ED is much larger than a CGM and therefore, they should draw a much higher salary than CGMs,” a former bank chief executive said.

Banks were given the flexibility to create CGM level with separate pay structure in August 2019. Following this, Bank of Baroda, Canara Bank, Punjab National Bank and Union Bank of India created the position in March 2020. Bank of India created the position in October last year.

Some of the banks such as erstwhile United Bank of India had created CGM post earlier but there was no pay scale benefit attached to that.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Government infuses Rs 14,500 crore capital into four public sector banks, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


NEW DELHI: The government has infused Rs 14,500 crore, mainly into banks that are under the RBI’s prompt corrective action framework to improve their financial health.

Indian Overseas Bank, Central Bank of India and UCO Bank are currently under this framework that puts several restrictions on them, including on lending, management compensation and directors’ fees.

Of the total infusion, Rs 11,500 crore has gone to these three banks while the remaining Rs 3,000 crore has been infused into Bank of India.

According to a government notification, Rs 4,800 crore has been provided to Central Bank of India, Rs 4,100 crore to Indian Overseas Bank and Kolkata-based UCO Bank has got Rs 2,600 crore.

The capital infusion will help these banks to come out of the Reserve Bank of India‘s prompt corrective action framework.

The fund infusion has been done through non-interest bearing recapitalisation bonds with maturity varying between March 31, 2031 and March 31, 2036.

The investment in the special securities by public sector banks would not be considered as an eligible investment which is required to made in government securities in pursuance of any statutory provisions or directions applicable to the investing bank, it said.

Most of the large state-owned lenders — including State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India, and Indian Bank — have already raised money from various market sources, including share sale on a private placement basis.

For the current financial year, the government had allocated Rs 20,000 crore for capital infusion into the public sector banks for meeting regulatory requirements.

Punjab & Sind Bank was given Rs 5,500 crore in November last year.

Separately, Central Bank of India and Bank of India informed stock exchanges about the fund infusion by the government.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Canara Bank receives e-bids for 14 lakh sq ft Supreme Business Park in Mumbai; reserve price Rs 1,370 cr

Banking & Finance

[ad_1]

Read More/Less


Canara Bank put the property up for auction under SARFAESI, seeking to recover Rs 385 crore after the loan to the property developer Supreme Housing and Hospitality Pvt Ltd. Image: Representational

State-run lender Canara Bank has received e-bids for sale of Supreme Business Park — a 1.28 lakh sq meter (about 14 lakh sq ft) commercial property with a built-up area of over 6.9 lakh sq feet in Powai, Mumbai. Canara Bank put the property up for auction under SARFAESI, seeking to recover Rs 385 crore after the loan to the property developer Supreme Housing and Hospitality Pvt Ltd turned bad. The reserve price for Supreme Business Park is kept at Rs 1,370 crore. The excess amount recovered will be given back to the borrower — Supreme Housing, an official told Financial Express Online. The bids will be opened on 30 March 2021.

Supreme Housing and Hospitality took a loan from Canara Bank in 2016, which later turned into NPA (non-performing asset). Under Sarfaesi Act, the bank can recover its dues by selling the securities. Canara Bank has applied for the physical possession of the entire property. The last date for the bid application submission was March 25, 2021. However, if the auction doesn’t go through for any reason this time, then it would reopen for bids. The E-auction agency is C1 India, and the prospective bidders could participate in the bidding process from anywhere.

According to the e-auction notice seen by Financial Express Online, the commercial property has two towers A and B. The building number 2 known as ‘Supreme Business Park’ consists of two wings, A and B. These wings have 4 stilts and 7 upper IT floors. The size of the mortgaged asset is 1.28 lakh sq meters, and it is owned by Bhawani Shankar Sharma.

Earlier this week, Canara Bank had announced to organise an auction of 2,000 borrower properties on March 26, 2021. The properties include residential flats, apartments, independent houses, industrial lands, commercial complexes, office spaces and vacant lands. These will be sold under the provisions of the Sarfaesi Act, PTI quoted an official statement. According to the statement, so far in the current financial year, Canara Bank has sold 1,450 properties valued at Rs 886 crore. The properties put up for auction are spread across Delhi, Mumbai, Kolkata, Bengaluru, Chennai, and also other semi-urban pockets.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,
1 … 3 4 5 6 7