MIRA
INFORM REPORT
|
Report Date : |
11.09.2013 |
IDENTIFICATION DETAILS
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Name : |
THE KARUR VYSYA BANK LIMITED |
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Registered
Office : |
Post Box No. 21,
Erode Road, Karur - 639 002, Tamilnadu |
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Country : |
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Financials (as
on) : |
31.03.2013 |
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Date of
Incorporation : |
22.06.1916 |
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Com. Reg. No.: |
001295 |
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Capital
Investment / Paid-up Capital : |
Rs. 544.356
Millions |
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CIN No.: [Company Identification
No.] |
L65110TN1916PLC001295 |
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Legal Form : |
A Public Limited Liability Company. The company’s Shares are Listed on
the Stock Exchange. |
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Line of Business
: |
Banking Activities |
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No. of Employees
: |
6730 [Approximately] |
RATING & COMMENTS
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MIRA’s Rating : |
Aa (72) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
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Maximum Credit Limit : |
USD 123400000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Exist |
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Comments : |
Subject is an old a well-established and a reputed private sector bank having fine track. The bank is doing well. Financial position of the company appears to be sound. Fundamentals are strong and healthy. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The Bank can be considered good for normal business dealings at usual trade terms and conditions. It can be regarded as a promising business partner in a medium to long run. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
India |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very
High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
We are living in a
world where volatility and uncertainty have become the New Normal. We saw a
change of government in countries like Tunisia, Egypt, Libya and Vietnam. Once
powerful countries in Europe are now fighting for bankruptcy. We have
taken growth in the developing part of the world for granted but economic
growth in China and India has begun to slow. Companies that were synonymous
with their product categories just a few years ago are now no longer in
existence. Kodak, the inventor of the digital camera had to wind up its
operations, HMV, the British entertainment retailing company and Borders, once
the second largest bookstore have shut down due to their inability to evolve
their business models with the changing time. Readers’ Digest, Thomson Register
are no more !
There is another
megatrend happening. The World order is changing as economic power shifts from
West to East. According to McKinsey study, it took Britain more than 100 years
to double its economic output per person during its industrial revolution and
the US later took more than 50 years to do the same. More than a century later,
China and India have doubled their GDP per capital in 12 and 18 years
respectively. By 2020, emerging Asia will become the world’s largest consuming
block, overtaking North America.
The years after the outbreak
of the global financial crisis, the world economy continues to remain fragile.
The Indian economy demonstrated remarkable resilience in the initial years of
the contagion but finally lost ground last year. GDP growth slowed down.
Currency has been weakening. There is a marked deceleration in agriculture,
industry and services. Dampening sentiment led to a cut-back in investment as
well as private consumption expenditure. Inflation remained at high
levels fuelled by the pressure from the food and fuel sectors. The large fiscal
and current account deficit s continued to cause grave concern. It is
imperative that India regains its growth trajectory of 8-9 % sooner than later.
This is crucially important given the need to create gainful livelihood opportunities
for the millions living in poverty as also the large contingent of young people
joining the job market every year.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CRISIL |
|
Rating |
A1+ [Certificate of Deposits] |
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Rating Explanation |
Very strong degree of safety and lowest credit risk. |
|
Date |
28.08.2013 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
INFORMATION DECLINED
Management non co-operative [91-4324-225521]
LOCATIONS
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Registered Office / Central Office: |
Post Box No. 21,
Erode Road, Karur – 639 002, |
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Tel. No.: |
91 4324-22520 / 225521-25 |
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Fax No.: |
91 4324-20202 / 225700 |
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E-Mail : |
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Website : |
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Divisional Offices: |
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Disaster
Recovery Site : |
01-04 1st Floor Unit-3 Block-I, Cyber Pearl Hi-Tech City,
Madhapur, Hyderabad-500081 |
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International Division: |
No. 37, Whites Road, 2nd Floor , Chennai – 600014,
Tamilnadu, India |
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Tel. No.: |
91- 44-28412090-92 |
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Branch Offices: |
Located At:
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DIRECTORS
AS ON 31.03.2013
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Name : |
Mr. K.P. Kumar |
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Designation : |
Chairman and Director |
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Name : |
Mr. K. Venkataraman |
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Designation : |
Managing Director |
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Name : |
Mr. M.G.S. Ramesh Babu |
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Designation : |
Director |
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Name : |
Mr. S. Ganapathi Subramanian |
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Designation : |
Director |
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Name : |
Mr. G. Rajasekaran |
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Designation : |
Director |
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Name : |
Mr. A.J. Suriyanarayana |
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Designation : |
Director |
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Name : |
Mr. K. Ramadurai |
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Designation : |
Director |
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Name : |
Mr. K.K. Balu |
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Designation : |
Director |
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Name : |
Mr. N.S. Srinath |
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Designation : |
Director |
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Name : |
Mr. B. Swaminathan |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. K. Venkataraman |
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Designation : |
Chief Executive Officer |
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Name : |
Mr. Krishnaswamy. V |
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Designation : |
President & COO |
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Name : |
Mr. Venkateswara Rao. K |
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Designation : |
Chief General Manager |
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Name : |
Mr. Ananda Nadarajan. A |
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Designation : |
General Manager |
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Name : |
Mr. Natarajan. J |
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Designation : |
General Manager |
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Name : |
Mr. Anantha Kumar. G.S |
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Designation : |
General Manager |
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Name : |
Mr. Sivarama Prasad. T |
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Designation : |
General Manager |
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Name : |
Mr. Ramesh Krishnan |
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Designation : |
General Manager |
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Name : |
Mr. Balaji. S |
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Designation : |
General Manager |
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Name : |
Mr. Srinivasan. V |
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Designation : |
General Manager |
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Name : |
Mr. Kannan R. |
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Designation : |
Company Secretary and Assistant General Manager |
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Deputy General Manager: |
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Names : |
Mr.
Venkataramana R Mr. Balachandran
M Mr. Subramanyam
V Mr. Srinivasan V Mr. Babuji S Mr.
Balasubramanian S Mr. Swaminathan
K P Mr. Mohan K Mr. Sankara
Vadivel T K Mr. Sekar S Mr.
Sathyamoorthy K Mr. Sairaj G R Mr.
Ramasubramanian S Mr. Ashok Kumar
G P Mr. Saravanun C Mr. Raghunathan S Mr. Ravi S Mr. Prasad S K V Mr. Swaminathan
K Mr. Sampath G Mr. Subbaiyan M Mr. Nagarajan K Mr. Kannan R |
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Assistant General Manager: |
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Names : |
Mr. Vijayakumar A Mr. Ashok Vennelakanti Mr. Ramalingam N Mr. Jarard Thomas Mr. Murali Kumar M Mr. Gopinath A Mr. Chelladurai S Mr. Pandiyan P Mr. Viswanadham M Mr. Parthasarathi R Mr. Lakshmanan L Mr. Varadharajan A Mr. Venkatesan R Mr. HariMr. haran K Mr. Venkatesh C Mr. Ramshankar R Mr. Ramkumar B Mr. Raghavendran N Mr. Mohan Kumar G Mr. Murali L Mr. Ramesh E Mr. Vasudevan S Mr. Lekshminarayanan V Mr. Chandrasekaran R N Mr. Ganesan R Mr. Elango R Mr. Sankaran P S Mr. Muralidharan V Mr. Sekar K S Mr. Anburaj V Mr. Gowri Shankar J Mr. Elango V Mr. Gopalan S Mr. Radhesyam T Mr. Ramakrishna C Mr. Palpandian M Mr. Srinivasan G V Mr. Sivakumar S Mr. Ravichandran K Mr. Satya Surya Prakash K |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.06.2013
|
Category of Shareholder |
Total No. of Shares held in Dematerialized Form |
Total Shareholding as a % of Total No. of Shares |
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(A) Shareholding of Promoter and Promoter Group |
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3304681 |
3.08 |
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3304681 |
3.08 |
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Total shareholding of Promoter and Promoter Group (A) |
3304681 |
3.08 |
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(B) Public Shareholding |
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12778459 |
11.92 |
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450966 |
0.42 |
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2151011 |
2.01 |
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26529616 |
24.75 |
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140 |
0.00 |
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140 |
0.00 |
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41910192 |
39.11 |
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7910453 |
7.40 |
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21831991 |
25.19 |
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22290269 |
22.91 |
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2472109 |
2.31 |
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142454 |
0.13 |
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404086 |
0.38 |
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1026337 |
0.96 |
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92639 |
0.09 |
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806593 |
0.76 |
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54504822 |
57.81 |
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Total Public shareholding (B) |
96415014 |
96.92 |
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Total (A)+(B) |
99719695 |
100.00 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
0 |
0.00 |
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0 |
0.00 |
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0 |
0.00 |
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0 |
0.00 |
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Total (A)+(B)+(C) |
99719695 |
0.00 |
BUSINESS DETAILS
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Line of Business : |
Banking Activities |
GENERAL INFORMATION
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Suppliers : |
Not Divulged |
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Customers : |
Not Divulged |
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No. of Employees : |
6730 [Approximately] |
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Bankers : |
Reserve Bank of |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
R.K. Kumar and Company Chartered Accountants |
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Address : |
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Legal
Adviser: |
Mr. K.N. Shrinivasan, BA., B.L. |
CAPITAL STRUCTURE
AS ON 31.03.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
200000000 |
Equity Shares |
Rs.10/- each |
Rs.2000.000 Millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
107268622 |
Equity Shares |
Rs.10/- each
|
Rs.1072.686 Millions
|
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
107180406 |
Equity Shares |
Rs.10/- each
|
Rs.1071.804
Millions |
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|
Add: Issue of 700 equity shares of Rs.10/- each kept in abeyance
earlier |
|
Rs.0.007
Million |
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TOTAL
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|
Rs.1071.811 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
CAPITAL & LIABILITIES |
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Capital |
1071.811 |
1071.804 |
944.872 |
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Reserves & Surplus |
29780.130 |
26010.385 |
20200.465 |
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Deposits |
386529.791 |
3221115.926 |
247218.513 |
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Borrowings |
39993.424 |
19725.614 |
5298.917 |
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Other Liabilities and Provisions |
9958.239 |
8425.156 |
8585.625 |
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TOTAL |
467333.395 |
3276348.885 |
282248.392 |
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ASSETS |
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Cash &
Balances with RBI |
16286.357 |
19208.667 |
16798.375 |
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Balances with
Banks and money at Call & Short Notice |
1673.841 |
1145.816 |
946.245 |
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Investments |
138372.581 |
105060.954 |
77317.560 |
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Advances |
294801.260 |
239491.864 |
178144.638 |
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Fixed Assets |
3221.098 |
2448.461 |
2105.691 |
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Other Assets |
12978.258 |
8993.123 |
6935.883 |
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TOTAL |
467333.395 |
376348.885 |
282248.392 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
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INCOME |
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Interest earned |
42424.290 |
32703.729 |
22176.953 |
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Other Income |
4525.616 |
3501.499 |
2643.333 |
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TOTAL |
46949.906 |
36205.228 |
24820.286 |
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Less |
EXPENDITURE |
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Interest expended |
30839.621 |
23532.461 |
14508.411 |
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Operating expenses |
7621.970 |
5415.638 |
4306.034 |
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Provisions and Contingencies |
2985.086 |
2239.889 |
1849.932 |
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TOTAL |
41446.677 |
31187.988 |
20664.377 |
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Net Profit For The Year |
5503.229 |
5017.240 |
4155.909 |
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PROFIT BROUGHT FORWARD |
17.727 |
23.114 |
18.546 |
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Add |
PROVISION FOR MEDICAL LEAVE |
0.000 |
148.000 |
0.000 |
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CHARITY ACCOUNT |
0.000 |
27.750 |
0.000 |
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Less |
APPROPRIATIONS |
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Transfers to Statutory Reserve |
1650.000 |
1505.000 |
1250.000 |
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Capital Reserve |
165.150 |
31.425 |
0.000 |
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Special Reserve |
500.000 |
350.000 |
300.000 |
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Revenue & Other Reserves |
1230.000 |
1568.000 |
1115.000 |
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Proposed Dividend |
1500.536 |
1500.529 |
1286.335 |
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Dividend Tax |
255.016 |
243.423 |
208.676 |
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Investment Reserve |
210.000 |
0.000 |
0.0000 |
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BALANCE
OF PROFIT |
10.254 |
17.727 |
14.444 |
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Earnings Per
Share (Rs.) |
|
|
|
|
|
|
- Basic |
51.35 |
46.81 |
44.90 |
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- Diluted |
50.94 |
46.81 |
44.83 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2013 |
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Interest Earned |
|
|
12225.300 |
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Income On Investments |
|
|
2805.400 |
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Interest On Balances With Rbi Other Inter Bank Funds |
|
|
11.800 |
|
Interest / Discount On Advances / Bills |
|
|
9207.200 |
|
Others |
|
|
200.900 |
|
Other Income |
|
|
2069.300 |
|
Total Income |
|
|
14294.600 |
|
Interest Expended |
|
|
8906.500 |
|
Operating Expenses |
|
|
2200.900 |
|
Total Expenditure |
|
|
2200.900 |
|
Operating Profit Before Provisions and Contingencies |
|
|
3187.200 |
|
Provisions and contingencies |
|
|
1631.600 |
|
Profit Before Tax |
|
|
1555.600 |
|
Tax |
|
|
352.600 |
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Profit After Tax |
|
|
1203.000 |
|
Net Profit |
|
|
12030.000 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by
Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
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2] |
Locality of the firm |
Yes |
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3] |
Constitutions of the firm |
Yes |
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4] |
Premises details |
No |
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5] |
Type of Business |
Yes |
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6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
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10] |
Designation of contact person |
No |
|
11] |
Turnover of firm for last three years |
Yes |
|
12] |
Profitability for last three years |
Yes |
|
13] |
Reasons for variation <> 20% |
-- |
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14] |
Estimation for coming financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister concerns |
No |
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17] |
Major suppliers |
No |
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18] |
Major customers |
No |
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19] |
Payments terms |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm / promoter involved in |
Yes |
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23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking account |
-- |
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26] |
Buyer visit details |
-- |
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27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if applicable |
Yes |
|
29] |
Last accounts filed at ROC |
Yes |
|
30] |
Major Shareholders, if available |
No |
|
31] |
PAN of Proprietor/Partner/Director, if available |
No |
|
32] |
Date
of Birth of Proprietor/Partner/Director, if available |
Yes |
|
33] |
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating, if available |
Yes |
LISTING DETAILS:
|
Subject Stock Code
: |
BSE : 590003 NSE : KARURVYSYA |
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Stock Exchange
Place : |
· The Stock Exchange, Mumbai National Stock Exchange of India Limited Bangalore Stock Exchange Limited Hyderabad Stock Exchange Limited MCX Stock Exchange The Stock Exchange, Mumbai Cochin Stock Exchange Limited Madras Stock Exchange Limited |
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Listed Date : |
Not Available |
INDEX OF CHARGES: NO CHARGES EXIST FOR COMPANY
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CAST DETAILS CHENNAI COURT CASE STATUS
INFORMATION SYSTEM |
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|
Case Status: |
Pending |
|
Status Of: |
WRIT PETITION |
|
Case No.: |
14885 |
|
Year : |
2013 |
|
Petitioner : |
AMMAN ABIRAMI TEXTILES |
|
Respondent : |
THE KARUR VYSYA BANK LIMITED |
|
Pet's Advocate : |
M/S.P.R.BALASUBRAMANIAN |
|
Res's Advocate : |
M/S.A.V.RADHAKRISHNAN |
|
Category : |
Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, |
|
Last Listed on: |
No Date Mentioned |
|
Case Updated on : |
03.07.2013 |
FINANCIAL
PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
Total income in
2012-13 stood at Rs. 46949.900 Millions against Rs. 36205.200 Millions reported
last year marking a growth of 29.68%. Interest income improved to Rs. 42424.300
Millions as at the end of 31.03.2013 as against Rs. 32703.700 Millions recorded
in 2011-12, representing an increase of 29.72%. The Non-interest income was Rs.
4525.600 Millions for FY 13 as against Rs. 3501.500 Millions in FY 12. Interest
expended increased to Rs. 30839.600 Millions in the fiscal under report from
Rs. 23532.500 Millions in the earlier fiscal 2011-12. Of the gross interest
expenditure, interest on deposits grew by 27.98% to Rs. 28197.100 Millions from
Rs. 22032.200 Millions during the corresponding previous fiscal.
The total
expenditure stood at Rs. 38461.600 Millions compared to Rs. 28948.100 Millions
in the previous year. The net interest income grew from Rs. 9171.200 Millions
to Rs. 11584.700 Millions, a growth of 26.32%. The Bank posted an operating
profit of Rs. 8488.300 Millions for the financial year 2012-13, against Rs.
7257.100 Millions achieved during the corresponding period last year. For the
year ended 2012-13, net profit increased by 9.69% to Rs. 5503.200 Millions from
Rs. 5017.200 Millions in FY 12. Net Interest Margin of the Bank was 3.03% as on
31.03.2013. The Return on Assets was at 1.35%
AWARDS AND
ACCOLADES:
The Bank received several
awards during FY13 for its consistent and all round performance. Given below
are the awards won/ accolades received during the year 2012-13.
FINANCIAL EXPRESS-BEST OLD PRIVATE SECTOR BANK,
2012 (RUNNER UP)
- Best Private Sector Bank award from Bloomberg
UTV Financial Leadership Awards 2012
- Best Small Bank award from Business
World – Price Waterhouse Coopers Awards 2012
- Award for Consistent Performance in
growth and profits under Small Bank Category 2012 presented by CNBC TV 18.
- IPE BFSI Best Employer Brand Award 2012
given by Institute of Public Enterprises, Hyderabad.
- IPE Corporate Excellence Awards (CEO’s)
Banking & Finance, 2012 presented by Institute of Public Enterprises,
Hyderabad.
- Business Leadership Award Category
given by Institute of Public Enterprises under Global HR Excellence Awards
(CEO’s).
- ‘Outstanding contribution to Brand
building award’ presented by Indira group of Institutes, Pune in their
12th Indira Awards for Marketing Excellence.
MANAGEMENT
DISCUSSION AND ANALYSIS:
WORLD ECONOMIC
OVERVIEW:
Global economy
turned weaker in 2012 and is expected to be sluggish during 2013. In its World
Economic Outlook, the International Monetary Fund (IMF) made a forecast of
world economic growth at 3.3% in 2013. There has been a marginal improvement in
the growth of US Economy. However, its growth momentum is likely to be lower in
2013 due to concerns on fiscal tightening. Growth in China was around 7.8% in
2012, lower than the previous year rate by 1.5%. Many developed economies,
particularly in Europe have already fallen into recession while others facing
sovereign debt burden have run deeper into recession. The developed economies
have adopted a combination of fiscal austerity measures and other monetary
policies in order to reduce public debt and lower debt refinancing costs with
the hope that the measures would restore consumer and investor confidence.
Most of the
central banks in the developed economies resorted to expansion of their asset
purchase program while simultaneously maintaining their monetary policies in
expansionary mode by maintaining lower interest rates during the fiscal 2013.
This was done to stimulate growth and in the wake of the fiscal austerity
measures undertaken in their countries. While in early 2013 the down side tail
risks have shown some improvement due to supportive policy action in the euro
area and the measures to tackle the fiscal cliff in the US, the global recovery
would suffer further if there is slowdown in the Chinese economy.
OVERVIEW OF THE INDIAN
ECONOMY:
Growth continued
to slow down in 2012-13, though it witnessed some recovery later during the
year consequent to improved governance and concerted action to resolve
structural bottlenecks. According to the first advance estimates of national
income for the year 2012-13 of the Central Statistical Office, the Indian
economy is expected to grow at 5% in 2012-13, slowest in a decade. The lower
performance was evident in all the three sectors of the economy –farm,
manufacturing and services sectors. The growth in agriculture and allied
activities is likely to be at 1.8% in 2012-13 when compared to 3.6% in the
previous fiscal 2011-12. The growth in the manufacturing sector is expected to
drop to 1.9% from 2.7% achieved during the earlier fiscal 2011-12. The services
sector including finance, insurance, real estate and business services which
witnessed a growth of 11.7% in 2011-12, is likely to grow only by 8.6% during
the fiscal 2012-13.
Average Wholesale
Price Index (WPI) and core inflation, which were 9% and 7.3% in 2011-12,
moderated to 7.3% and 4.8%, respectively after remaining higher for most part
of the year and the pace of decline has been rather significant in the last two
months of 2012-13. Moderation in core inflation was due to the recent softening
of global commodity prices coupled with stability in the Rupee and largely due
to the strong Monetary measures undertaken by RBI. However consumer price
inflation ruled at more than 10% in March 2013.
CENTRAL GOVERNMENT
HAS PROJECTED A REVISED FISCAL DEFICIT OF 5.2% OF GDP FOR THE FISCAL 2012-13.
Gradual easing of
the monetary policy was done by the RBI in the backdrop of fiscal consolidation
move by the Government, moderation in WPI inflation and deceleration in GDP
growth momentum. The RBI brought about 100 bps or 1 percentage point reduction
in repo rate in the fiscal 2012-13 to support growth. It announced a rate cut
of 50 bps on April 17, 2012 and further slashed the repo rate by 25 bps each on
January 29, 2013 and March 19, 2013. CRR which was 4.75% in March 2012 was
lowered to 4% in March 2013. SLR was also lowered from 24% to 23%. RBI has also
conducted Open Market Operations (OMOs) aggregating to Rs. 1271800.000 Millions
to ease the liquidity position.
The Rupee started
the year 2012-13 on a weak note depreciating by 10.1% between end March 2012
and end June 2012 in the backdrop of deteriorating growth inflation balance,
Current Account Deficit and tax related uncertainty (in the form of General
Anti Avoidance Rules (GAAR)). Various reform measures, interalia, postponement
of GAAR by two years, partial deregulation of diesel prices, liberalized FDI
limits for certain sectors, rise in FII limits in Corporate Debt and Government
Securities (G Sec) market and announcement of fiscal consolidation path,
further boosted the confidence of the global investors in our economy and have
reflected in the rupee showing modest appreciation in January 2013. Overall the
Rupee remained stable against the Dollar in Q4 than Q3 of 2012-13.
The net investments
of FII in 2012-13 was Rs. 1.7 trillion in the capital market comprising both
equity and debt compared with that of Rs. 0.9 trillion in 2011-12. India’s
exports decreased by 1.76 percent to $300.6 billion in 2012-13 owing to global
economic uncertainties. The imports, however, increased by a marginal 0.44
percent to $491.48 billion from $489.31 billion in 2011-12, leaving a trade
deficit of $190.91 billion, an increase of 4.12 percent, from $183.35 billion
in 2011-12.
OVERVIEW OF THE
INDIAN BANKING SECTOR:
In the last two
years the Indian Banking sector has displayed a high level of resilience in the
face of high domestic inflation, depreciation in Indian Rupee and fiscal
uncertainty in the United States and Europe. In order to stimulate the economy
and support the growth of banking system the RBI adopted many policy measures
such as varying the key monetary policy rates like repo and reverse repo many
times and tightening the provisioning requirements. As stated earlier the
Indian economy is expected to grow around 5% during the fiscal 2012-13.
Both deposit and
credit growth in the economy at 14.3% and 14.1% respectively have fallen way
below the RBI’s projection of 16% and 17% respectively for 2012-13. The
aggregate deposit growth during 2012-13 at around 14% is mainly because of
deceleration in time deposit growth. One major reason for the deceleration was
near zero real interest return on term deposits largely due to higher
inflation. Although there was a monetary policy easing over 2012-13 some banks raised
their deposit rates, from Mid December 2012, in certain maturity buckets in
view of the tight liquidity conditions, resulting in a marginal increase in the
deposit rate by 2 bps during H2 of FY13. This was against the 13 bps decline in
H1 of the said fiscal. During Q4 FY 2013, although the deposit growth of
Scheduled Commercial Banks continued to decelerate, going forward it is
expected to rise.
In view of the
decline in the growth of the economy the demand for credit was adversely
affected. Supply of domestic credit was further impacted by the deterioration
in credit quality. Although RBI injected liquidity in the system, adverse
sentiments emanating from global and domestic developments somewhat dampened
the credit expansion and the Scheduled Commercial Banks non-food credit growth
remained below the expectation of the regulator. Lower credit growth is due to
both demand and supply factors. On the demand side the RBI ascribed subdued
credit demand to poor investment appetite on account of policy logjam and not
on interest rates. Despite low off take, credit growth remained above deposit
growth for most part of the fiscal 2012-13.
Another
contributing factor to the lower credit growth in the banking sector over the
previous fiscal 2011-12, is the deterioration in its asset quality. During the
year 2011-12 the asset quality of banks was severely impaired, as revealed by
the steep increase in Non-performing assets of Scheduled Commercial Banks,
particularly the public sector banks. This was due to the significant exposure
to troubled sectors such as power, aviation, real estate and telecom. The asset
quality has further deteriorated during the fiscal 2012-13. Gross NPAs in the
Banking system recorded a y-o-y growth of 45.3% and net NPAs recorded y-o-y growth
of 55.6% in fiscal 2011-12. Gross NPAs are moving towards 4% mark in 2012-13.
Apart from increase in NPAs, deterioration in asset quality of the Banks was
visible from the significant increase in restructured assets. Restructured
advances of the Scheduled Commercial Banks has risen by 58.5% during the fiscal
2011-12. The ratio of Restructured advances to the total advances also
increased to 4.7% in fiscal 2011-12 from 3.5% in fiscal 2010-11. As at
September 2012, 466 cases have been referred to CDR cell with 327 cases
aggregating to Rs. 1874 bn have been approved since the start of the CDR
mechanism. On the technology side, there has been a rapid progress in mobile
banking. In the near term it is expected to be one of the most preferred
mediums for banking transactions.
OUTLOOK:
India has recorded
much faster economic growth than most of other economies and it probably has
become the third biggest economy in the world. Yet the growth in the last
couple of years has been well below the expectation and forecasts. The long
slow down in the economy reflects a combination of softening world economy and
its own structural problems such as high interest rates and high inflation. The
worst seems to have been over for our economy with the business surveys pointing
out to acceleration in the growth. The business surveys indicate start
of the upturn in
confidence levels and interest rate conditions expected to come down.
The India
Meteorological Department has projected normal monsoon during the current
fiscal 2013-14. A normal monsoon augurs well for the agriculture sector which
employs majority of the Indian population. Agriculture is crucial as it
accounts for goods produced by industry and the services sector. Despite slow
economic growth the bank has performed reasonably well and posted comfortable
results. The Bank has very strong fundamentals which are reflected in the
business figures, NPA levels, profits and has an uninterrupted track record of
profit and dividend payments since its inception 96 years ago. The large
presence of the Bank’s branches in rural and semi urban areas provides a great
scope for the Bank for improving its exposure to Agriculture and Retail
business, to register a balanced
A wide range of
delivery channels, good presence in metro centers and young work force provide
a great potential for the Bank to fully exploit the tech savvy products to its
advantage. The Bank has been making constant up gradation of its technology and
service platforms to support business growth and meet customer expectations. We
have committed ourselves to become one of the most preferred banks with best
standards in the industry and have been constantly taking various initiatives
to attain the set goal. We have been marching towards a visionary business level
of Rs. 1.25 lakh Cr with a net work of 800 branches by the centenary year 2016.
The Bank has
already set the goals for the current fiscal and has started monthly reviews.
As in the past the bank would also be undertaking quarterly reviews of the
performances of the Divisions at the top level. Strategically the focus
continues to be on the Retail Banking, CASA growth, lending to Housing, MSME,
Agriculture, fee based income, reduction of NPAs and arresting fresh slippages
to NPAs and more retail credit disbursement.
CONTINGENT LIABILITIES:
|
Particulars |
31.03.2013 [Rs. in millions] |
31.03.2012 [Rs. in millions] |
|
Claims against the Bank not acknowledged as debts |
66.144 |
63.553 |
|
Liability on account of outstanding: |
0 |
0 |
|
Forward Exchange Contracts |
63118.783 |
46179.046 |
|
Derivatives |
0.000 |
0.000 |
|
Guarantees given on behalf of Constituents in India |
20029.114 |
18632.040 |
|
Acceptances, Endorsements and other Obligations |
14633.054 |
14630.782 |
|
TOTAL
|
97847.095 |
79505.421 |
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, bloked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.64.21 |
|
|
1 |
Rs.100.83 |
|
Euro |
1 |
Rs.85.21 |
INFORMATION DETAILS
|
Information Gathered
by : |
PLK |
|
|
|
|
Report Prepared
by : |
TPT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.