Rupee gains another 10 paise against the dollar
Mumbai: The rupee strengthened by about 10 paise against the dollar on Monday, on the back of strong inflows, closing at 40.77/78, up from the previous close of 40.87.

Forwards: The six-month premia closed at 2.93 per cent (3.14 per cent) while the 12-month closed at 2.82 per cent (2.88 per cent).

Bonds: Prices fell by about 55 paise and the yields went up by 8 basis points. The yields on the 10-year paper ended at 8.2 per cent against the previous close of 8.28 per cent. The total traded volumes on the order matching system were Rs7,020 crore (Rs 4,915 crore).

The 7.49 per cent 10-year-paper closed at Rs95.26 (8.2 per cent YTM) against Friday's close of Rs94.71 (8.28 per cent YTM). The 8.07 per cent 10-year-paper closed at Rs99.76 (8.11 per cent YTM) against the previous close of 99.50 (8.14 per cent YTM).

Call rates: Call rates ended at 2.75 per cent to 3 per cent against the previous close of 3 per cent to 3.25 per cent.

Repo: There were no repo bids in the first liquidity adjustment facility. In the first one-day reverse repo auction, the RBI received 28 bids for Rs35,700 crore and accepted 28 bids for Rs2,000 crore. In the second one-day reverse-repo auction, it received 33 bids for Rs33,750 crore and accepted 30 bids for Rs999 crore.

CBLO: The CBLO market saw 331 of trades aggregating Rs27,070.2 crore in the 0.03 per cent-0.75 per cent range.
Back to News Review index page  

ICICI Bank's global operations do well - overseas branches and subsidiaries break even
Chennai: ICICI Bank's international operations are doing well, with all its overseas branches and wholly owned subsidiaries, except its wholly owned Canadian subsidiary, breaking even, a bank official has said.

ICICI Bank has a presence in 17 countries.

According Ms Madhabi Puri Buch, executive director of the bank, foreign operations have accounted for 19 per cent of its consolidated balance sheet. Ms Buch was responding to a question on the profitability of the international operations of ICICI Bank during a press conference to announce the bank's public offer of equity shares. The bank is coming out with an issue of Rs8,750 crore.

According to information provided in the offer document, foreign operations, comprising branches having operations outside India and the offshore banking unit in Mumbai, contributed the equivalent of Rs2,027 crore or about seven per cent of the revenues in 2006-07.
Back to News Review index page  

S&P assigns `BB' rating for SBI's perpetual bonds
Mumbai: Global rating agency Standard & Poor's has assigned a `BB' rating to State Bank of India's proposed $225-million Hybrid Tier I perpetual bonds, putting it in the non-investment grade category.

The bonds are to be issued under the bank's $5-billion Medium Term Notes (MTN) programme. The bonds will be perpetual notes with a call option of 10 years from the date of issue, said a press release from Standard & Poor's.

The rating differential between the `BBB-' counter party credit rating and the `BB' rating on the Hybrid Tier I notes reflects the junior subordinated nature of the notes and the embedded interest deferral feature, said the release.

The S&P release said the interest deferral feature is linked to compliance with the regulatory capital adequacy ratio (RCAR) and a profit test. If SBI Bank's RCAR is below the minimum regulatory requirement stipulated by the Reserve Bank of India, it will be mandatory to skip interest payments.

SBI officials however were sanguine about the rating. They said banks do not get a rating better than `BB' for their perpetual debt, which are less attractive than the senior unsecured bonds. According to these officials, the bank had raised around $400 million in the overseas market with the same rating in the month of February, and so they do not perceive much of a problem in raising the fresh amount of $225 million.
Back to News Review index page  

PNB drops equity offering - to raise Tier II capital
New Delhi: Punjab National Bank (PNB) will not make any equity offering in the current fiscal, which would further trim Government stake from 57.8 per cent to 51 per cent.

The bank, however, plans to raise tier-II capital and even look at innovative perpetual debt to fund their growth plans for the fiscal.

Responding to questions about a follow-on equity offering in the current fiscal, Dr K.C. Chakrabarty, the new chairman and managing director ruled it out completely, saying that this was not the appropriate time to sell tier-I equity and raise capital. He pointed out that there were many other alternatives available with the bank for raising capital, including tier-II capital and innovative perpetual debt.

PNB may go in for Rs500 crore of tier-I perpetual debt and Rs1,000 crore of tier-II capital this fiscal.

Dr Chakrabarty's thumbs down comes in the face of earlier signals from the bank's management that an equity offering could take place this fiscal in order to fund growth and expansion plans and meet Basel II.
Back to News Review index page