Yes Bank invokes United Breweries’ shares worth Rs 778 cr

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Private sector lender Yes Bank has invoked 3.02 percent stake of United Breweries , pledged by McDowell Holdings, a unit of Vijay Mallya-led UB Group, by selling shares worth Rs 778 crore.

 

The move comes after State Bank of India (SBI) declared Mallya, Kingfisher Airlines and its holding company United Breweries Holdings, as willful defaulters for defaults on nearly Rs 7,000-crore loans to the long-grounded carrier.

 

In a notification to exchanges, United Breweries said that Yes Bank has invoked a total of 79.81 lakh shares, amounting to 3.02 percent stake. These shares were pledged by McDowell Holdings.

 

At Friday’s closing price of Rs 974.80 apiece, the shares sale of United Breweries is valued at Rs 778 crore.

 

Yes bank has invoked the stake “to secure loans given to group companies.”

 

Currently, Mallya and his family members hold 34.04 percent stake in United Breweries through various companies and 15.57 percent of stake was pledged with various financial institutions.

 

Now, Heineken is the largest shareholder of United Breweries with 42.22 percent stake.

 

Last week, Yes Bank had sold 4.25 lakh shares of United Breweries, India’s largest brewer that makes Kingfisher Beer, for Rs 39.48 crore through an open market transaction. These shares were purchased by Heineken International BV, the maker of Heineken beer.

 

Meanwhile, the 17 lenders to the airline had said they will e-auction the assets of the grounded airline, in their latest bid to part recover their dues of around Rs 7,000 crore and accrued interest on the principal, that has not been serviced since January 2013.

 

The airline, owned by flamboyant liquor baron Mallya, had taken Rs 6,900 crore from a consortium of 17-lenders, led by SBI, in early 2010 after a second debt restructuring for the airline.

 

United Brewerie stock price On November 30, 2015, United Breweries closed at Rs 952.05, down Rs 22.75, or 2.33 percent. The 52-week high of the share was Rs 1225.00 and the 52-week low was Rs 732.05.

 

The company’s trailing 12-month (TTM) EPS was at Rs 9.80 per share as per the quarter ended September 2015. The stock’s price-to-earnings (P/E) ratio was 97.15. The latest book value of the company is Rs 69.95 per share. At current value, the price-to-book value of the company is 13.61.
Source: http://www.moneycontrol.com/news/business/yes-bank-invokes-united-breweries-shares-worth-rs-778-cr_4373361.html

Bandhan Bank starts disbursing loans

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Bandhan Bank Chairman and Managing Director Chandra Shekhar Ghosh has started disbursing regular loans, although at a muted pace, on steady deposit mobilisation.

The bank is offering retail, small and medium enterprises and agriculture loans. Housing loans have been capped at Rs 1,5 lakh commercial vehicle loans at Rs 1,0 lakh and loans to small and medium enterprises at Rs 2,5 lakh. All loans are linked to the base rate, which is set at 12 per cent, much higher than most banks. According to a Bandhan Bank spokesperson, it started its credit operations on a small scale about a month ago. The bank was launched on August 23, 2015.
Bandhan Bank has garnered deposits of Rs 3,700 crore, according to C S Ghosh, CEO and MD. The bank expects a fresh round of capital infusion of Rs 428 crore from International Finance Corporation and the Singapore government-backed GIC by March 2016. The two agencies have already invested Rs 1,020 crore in the bank and have committed an equity investment of Rs 1,600 crore.

The capital base of Bandhan Bank is Rs 2,570 crore, against the regulatory requirement of Rs 500 crore.

Fresh capital infusion will bolster this to Rs 3,052 crore, translating to a credit risk-weighted asset ratio of 44.54 per cent, one of the highest in the sector.

The bank is depending on aggressive deposit mobilisation to bring down cost of funds over the next year.

The plan is to be aggressive in taking deposits while going slow in lending. Thus, even as its lending rates are high, the bank is offering competitive deposit rates. Savings interest rates have been fixed at 4.25 per cent for deposits below Rs 1 lakh and five per cent for above Rs 1 lakh. For term deposits, the maximum interest rate, between three-five years maturity, has been fixed at 8.5 per cent, with an additional 0.5 per cent for senior citizens. Bandhan Bank started operations with a simultaneous launch of 501 branches, 50 ATMs, a microloan book of Rs 10,500 crore and savings accounts totalling 1.43 million. By the end of this financial year, the plan is to have 632 branches and 250 ATMs in 27 states.

Souce: http://www.business-standard.com/article/finance/bandhan-bank-starts-disbursing-loans-115112600031_1.html

 

Global Financial Secrecy Index: Hong Kong, Singapore’s ranks rise

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Hong Kong and Singapore have increased their ranking for financial secrecy, with the Chinese territory rising to number two, behind only Switzerland in a 2015 index of the world’s offshore havens, compiled by the Tax Justice Network (TJN).

Both the Asian financial hubs have made insufficient reforms to their corporate secrecy regimes, according to the London-based TJN, which campaigns for greater transparency in finance. Singapore’s ranking moved to fourth from the fifth place it held in the organisation’s previous index in 2013, when Hong Kong placed third.

“Singapore, in fourth place, poses many of the same threats that Hong Kong does: a lack of serious reforms to its corporate secrecy regime; a lack of interest in creating country-by- country reporting or in creating public registries of beneficial ownership,” the TJN said.

The two cities each account for about 4 per cent of the global market for offshore financial services, the organisation said. The hubs are well exposed to offshore flows because of rising assets under management and their status as regional financial hubs, according to the TJN.

“We do not have laws protecting bank secrecy and so we have never attracted foreign capital by such means,” a spokesman for Hong Kong’s Financial Services and the Treasury Bureau said in an e-mailed response to the TJN survey. “Hong Kong has all along been highly supportive of international efforts to enhance tax transparency and combat tax evasion,” the spokesman added.

The US was ranked third for its refusal to take part in a global system for exchanging bank data created by the Organisation for Economic Cooperation and Development.

Source: http://www.business-standard.com/article/economy-policy/global-financial-secrecy-index-hong-kong-singapore-s-ranks-rise-115110301720_1.html

 

Moody’s Raises Indian Banks’ Outlook to Stable

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Rating agency Moody’s Investors Service revised its outlook on India’s banking system to “stable” from “negative” on Monday, saying an improving economy would help temper problem-loans on banks’ books.

Moody’s, however, cautioned that any recovery in asset quality would be gradual given the high debt levels in Indian companies.

Indian banks, particularly state-run banks, have been saddled with bad loans estimated at nearly $50 billion as the economy slowed sharply in the last three years.

But recent earnings reports, including from top private sector lender ICICI Bank, suggested asset quality may be stabilising.

Moody’s said it expected India’s economy to grow around around 7.5 per cent in 2015 and 2016 each, supported by low inflation and gradual implementation of structural reforms.

“The stable outlook on India’s banking system over the next 12-18 months reflects our expectation that the banks’ gradually improving operating environment will result in a slower pace of additions to problem loans, leading to more stable impaired loan ratios,” Moody’s said in the statement.
“However, the recovery in asset quality will be U-shaped rather than V-shaped, because corporate balance sheets remain highly leveraged.”
Moody’s also noted that capital levels remained weak for state-owned banks, with common Tier 1 ratios of only 6 to 10 per cent, though lenders retain plentiful of access to funding and liquidity.

Moody’s had downgraded India’s banking system outlook to “negative” in November 2011.

The ratings agency had upgraded India’s sovereign outlook to “positive” in April, while retaining its rating at “Baa3”.

Source: http://profit.ndtv.com/news/banking-finance/article-moodys-ups-indian-banking-sector-outlook-to-stable-1238974

Commerce ministry firming up Africa-focused export strategy

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The commerce department is firming up an export strategy focused on Africa, giving a new dimension to the government’s strategic push for ties with the continent that could offer a large market for Indian goods at a time of slowing global demand.

While India has offered a $10 billion credit line to Africa, the department has extended the benefits under the Merchandise Exports from India (MEIS) scheme to many goods headed for Africa to make the most of this credit. Senior government officials led by commerce minister Nirmala Sitharaman will next week apprise Parliament’s consultative committee on plans to address India’s continuously falling exports, with a focus on Africa and the country’s neighbours. The meeting is to be in held in Goa on November 6-7.

“Since the situation is not good globally, we have decided to focus on exports to Africa and our neighbouring countries. We can use our competitiveness in these markets to increase exports. We are working on an export strategy for next week’s meeting,” said a commerce department official, who did not wish to be named.
At the meeting the committee will also discuss Foreign Trade Policy (FTP) 2015-20 and its implications on exports, the official said. The steady decline in exports has triggered apprehensions that India may even miss last year’s exports figure of $310.5 billion. Merchandise exports fell nearly a quarter in September, the tenth straight month of decline, raising worries that shipments may fall short of last year’s levels.
The Directorate General of Foreign Trade (DGFT) has included exports of textiles and ready-made garments including cotton fabrics, both woven and knitted, and made-ups to the African countries under the MEIS. The industry, which has been grappling with falling exports, has approved of this strategy.

Following the revision, exports of value-added and labour intensive products such cotton dyed and printed fabrics, and made-ups, to African countries such as Mauritania, Mali, Niger, Benin, Angola, Senegal, Togo, Ghana, Kenya and Tanzania are expected to receive a huge boost. “This is a very positive step taken by the government and has come as a huge relief to the exporters of cotton textiles who are faced with declining exports,”Texprocil chairman RK Dalmia said in a statement.