Citi India, part of
the US based global banking giant Citibank, on Wednesday reported a growth
of 41 per cent in net profits for 2012-13 at Rs 2,720 crore, helped by
robust growth in commercial banking, mortgage business and moderation in
operating expenses. Operating expense to income ratio of the bank stood at 40
per cent as at March 31, 2013 as compared to 44.5 per cent as at March 31,
2012. “During the financial year 2012-13, we have seen sustained expansion in
the commercial banking segment, high off-take of trade loans by global banking
customers and growth in our mortgage business,” Abhijit Sen, chief financial
officer of Citi India, said in his post-earnings comments. The total assets
of the bank were Rs 1.28 lakh crore at the end of the last financial year.
Advances rose 10 per cent year-on-year to Rs 52,036 crore, while mortgage book
expanded 16.7 per cent to Rs 9,949 crore. Citi India said it has continued
to be leading arranger of capital for the India financial system, raising close
to USD 8.5 billion and also played a key role in government’s disinvestment
programme. The bank said that its capital adequacy ratio improved to 15.90
per cent and the net NPA ratio was 1.47 per cent.
Sunday, July 21, 2013
Charge Card versus Credit Card
Customers quite often confuse between the charge card and thecredit card to be the same. Charge card can be said very close to credit cards, but it needs outstanding amount to be paid at once on arrival of due date, without any revolving facility. There is no charge levied on the outstanding till due date, subsequently it attracts a penalty up to 5%.
Lets understand this with the help of an example; A bank charges a 4% penalty on total outstanding after the due date(Minimum fine being Rs. 500). Suppose the outstanding is Rs. 20000, then the customer is liable to pay Rs. 800 as a penalty for the delay in payment, however in case of credit card, customers can carry forward such due for payment in the next month.
Some of the Indian banks that are offering charge card to its customers are: American Express, Citi Bank, Axis Bank etc.
Card Transaction Power
The transaction limit of the charge card is not predefined.The The credit history, transaction pattern and personal financial record of client determines the credit limit of a charge card. In credit card, the purchase limit is preset and customers know its usage limitations in advance.
Who is the Customer?
Charge card suits well with a young customer who wants to make a good credit report. Customer can use a charge card with discipline to make a good Credit blueprint that is frequently accessed by the credit bureau. It also helps a card customer to control the spending and avoid debt overburden.
On the other hand, credit cards inculcate borrowing habit in the customer and it can damage the credit profile if not used with extra care.
The absence of revolving facility and lack of installment for outstanding amount can make credit card attractive for the easy going customers but the financially savvy customers would find a charge card to be a better option.
Charge Card and Credit Card Comparison
Though charge card and credit card seem similar in use but there is a significant
Outstanding bill payment
Charge Card: Compulsory to pay every month on the due date
Credit Card: The revolving credit facility allowed
Usage Limit
Charge Card: No predetermined limit. The usage pattern, credit history and financial capacity decide the usage limit.
Credit Card: Predefined credit limit
Other fees
Charge Card: A hefty annual fee is charged. Prepayment of the outstanding bill attracts penalty
Credit Card: Zero annual fee. No penalty for prepayment of due bill.
Lets understand this with the help of an example; A bank charges a 4% penalty on total outstanding after the due date(Minimum fine being Rs. 500). Suppose the outstanding is Rs. 20000, then the customer is liable to pay Rs. 800 as a penalty for the delay in payment, however in case of credit card, customers can carry forward such due for payment in the next month.
Some of the Indian banks that are offering charge card to its customers are: American Express, Citi Bank, Axis Bank etc.
Card Transaction Power
The transaction limit of the charge card is not predefined.The The credit history, transaction pattern and personal financial record of client determines the credit limit of a charge card. In credit card, the purchase limit is preset and customers know its usage limitations in advance.
Who is the Customer?
Charge card suits well with a young customer who wants to make a good credit report. Customer can use a charge card with discipline to make a good Credit blueprint that is frequently accessed by the credit bureau. It also helps a card customer to control the spending and avoid debt overburden.
On the other hand, credit cards inculcate borrowing habit in the customer and it can damage the credit profile if not used with extra care.
The absence of revolving facility and lack of installment for outstanding amount can make credit card attractive for the easy going customers but the financially savvy customers would find a charge card to be a better option.
Charge Card and Credit Card Comparison
Though charge card and credit card seem similar in use but there is a significant
Outstanding bill payment
Charge Card: Compulsory to pay every month on the due date
Credit Card: The revolving credit facility allowed
Usage Limit
Charge Card: No predetermined limit. The usage pattern, credit history and financial capacity decide the usage limit.
Credit Card: Predefined credit limit
Other fees
Charge Card: A hefty annual fee is charged. Prepayment of the outstanding bill attracts penalty
Credit Card: Zero annual fee. No penalty for prepayment of due bill.
HDFC Bank offers credit cards in areas with population of less than 10,000
Plastic
money is gaining acceptance in rural India. HDFC Bank, the second largest private lender in the
country, has started offering credit cards even at its rural branches. Bank branches in
areas with a population of up to 9,999 are classified as rural branches.
On an incremental basis, nearly 25 per cent of HDFC Bank’s credit cards are now sourced from rural and semi-urban markets even as 40 per cent of Indian population is believed to be in want of a bank account. The bank has started setting up point-of-sale (POS) terminals across merchant establishments in these geographies to encourage customers to use credit cards. “The potential for growth is significantly high in smaller markets since the penetration of credit cards in these areas is relatively low. In the last couple of years, we have increased our investments on the acquisition side and are expanding the number of POS terminals in rural and semi-urban locations,” Parag Rao, senior executive vice-president and business head for credit cards and merchant acquiring services at HDFC Bank, told Business Standard. He added HDFC Bank was now offering credit cards, along with other retail banking products across most of its branches in rural and semi-urban centres. “We aim to cover all locations where we have branches. All our rural and semi-urban branches, barring a few that have started functioning recently, are offering credit cards to the bank’s customers,” Rao said.
The bank currently has more than half of its 3,062 branches in rural and semi-urban markets. The private lender opened 518 branches in 2012-13 of which 459 were in these markets. HDFC Bank is currently the largest issuer of credit cards in the country with a portfolio of 6.53 million cards. On an average, it issues around 70,000 cards every month.
Most banks and credit card companies currently do not offer credit cards in rural geographies. However, lenders are exploring opportunities to grow this business outside metro cities. “Smaller markets are becoming important both in terms of card acquisition and spend. The credit card business is no longer restricted to the top eight Indian cities. While the number of POS terminals have not increased significantly in smaller towns, e-commerce is gaining popularity. We find many of our customers from these centres are increasingly using their credit cards for online transactions,” said Jairam Sridharan, senior vice-president and head of consumer lending and payments at Axis Bank. The private lender is yet to expand its credit card business in rural India but nearly 30-40 per cent of its incremental card sourcing is currently from locations outside the top eight Indian cities. The bank has a portfolio of 1.1 million credit cards.
http://www.business-standard.com/article/finance/plastic-money-gains-acceptance-in-rural-india-113071000766_1.html
On an incremental basis, nearly 25 per cent of HDFC Bank’s credit cards are now sourced from rural and semi-urban markets even as 40 per cent of Indian population is believed to be in want of a bank account. The bank has started setting up point-of-sale (POS) terminals across merchant establishments in these geographies to encourage customers to use credit cards. “The potential for growth is significantly high in smaller markets since the penetration of credit cards in these areas is relatively low. In the last couple of years, we have increased our investments on the acquisition side and are expanding the number of POS terminals in rural and semi-urban locations,” Parag Rao, senior executive vice-president and business head for credit cards and merchant acquiring services at HDFC Bank, told Business Standard. He added HDFC Bank was now offering credit cards, along with other retail banking products across most of its branches in rural and semi-urban centres. “We aim to cover all locations where we have branches. All our rural and semi-urban branches, barring a few that have started functioning recently, are offering credit cards to the bank’s customers,” Rao said.
The bank currently has more than half of its 3,062 branches in rural and semi-urban markets. The private lender opened 518 branches in 2012-13 of which 459 were in these markets. HDFC Bank is currently the largest issuer of credit cards in the country with a portfolio of 6.53 million cards. On an average, it issues around 70,000 cards every month.
Most banks and credit card companies currently do not offer credit cards in rural geographies. However, lenders are exploring opportunities to grow this business outside metro cities. “Smaller markets are becoming important both in terms of card acquisition and spend. The credit card business is no longer restricted to the top eight Indian cities. While the number of POS terminals have not increased significantly in smaller towns, e-commerce is gaining popularity. We find many of our customers from these centres are increasingly using their credit cards for online transactions,” said Jairam Sridharan, senior vice-president and head of consumer lending and payments at Axis Bank. The private lender is yet to expand its credit card business in rural India but nearly 30-40 per cent of its incremental card sourcing is currently from locations outside the top eight Indian cities. The bank has a portfolio of 1.1 million credit cards.
http://www.business-standard.com/article/finance/plastic-money-gains-acceptance-in-rural-india-113071000766_1.html
Wednesday, July 3, 2013
China’s ICBC is the World’s largest bank: Banker magazine
China’s
Industrial and Commercial Bank of China (ICBC) has displaced Bank of America
(BoA) from The Banker magazine's annual list of the top 1,000 banks with most
capital. BoA was down to third from its first position in 2012, and JP Morgan
Chase retained its second spot. The total capital for the top 25 banks has
increased 10.8 per cent, predominantly thanks to the growth of Chinese banks,
and the capital-to-assets ratio continues to strengthen, to 5.16 per cent. But
compare this with the 13.4 per cent rise for Tier 1 across the Top 1000 as a
whole, which brought the aggregate capital-to-assets ratio to 5.48 per cent.
The dramatic growth and profitability in this ranking tends to be found further
down the scale. In fact, the minimum Tier 1 capital needed to enter the Top
1000, which has grown every year in the past decade except in 2011’s ranking,
raced ahead this year to cross the USD 300m mark for the first time, reaching
USD 342m. China had four banks in the top 10 and 96 in the Top 1,000. UK’s HSBC
ranked fourth in the list. Africa, meanwhile, came up as a top performer this
year. At 2.3 per cent, it now has a higher share of global profits than Western
Europe, despite accounting for less than 0.8 per cent of global assets.
Overall, pre-tax profits for the Top 1000 in the 2013 ranking increased by 6.7
per cent, compared with a decline of 1 per cent in the previous year.
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