Mumbai, April 27
ICICI Bank, India's No. 2 lender, reported a better-than-expected 31.1 per cent rise in quarterly profit on Friday, bolstered by higher income from noncore operations and strong loan growth.

Demand for loans in India is expected to pick up after the central bank last week cut its benchmark lending rate for the first time in three years to help revive sagging economic growth.

Net profit rose to Rs 1,902 crore ($362 million) in the fiscal fourth quarter ended March from Rs 1,452 crore reported a year earlier, while net interest income jumped nearly 24% to Rs 3,105 crore.

Other income, which includes gains from treasury and fees, rose nearly 36% to Rs 2,230 crore, said the bank, which is also listed in New York and competes with State Bank of India and HDFC Bank.

The bank's loans grew 17% to nearly $50 billion, it said. Net interest margin, a key gauge of profitability for a bank, rose to 3.01% from 2.74% a year ago. Provisions, including for bad loans, rose more than a fifth to Rs 4.7 billion from Rs 3.8 billion a year earlier, while net nonperforming loans dropped to 0.73% of total assets from 1.11%, the bank said.

Consolidated profit grew 15 per cent to Rs 18.1 billion, the bank said.

At 1:35 p.m. (0805 GMT), shares of the bank, valued by the market at $18.5 billion, were up 3.3% at Rs 869.1 in a Mumbai market that was down 0.2%.

Last week HDFC Bank reported the customary 30% rise in quarterly profits for March, helped by a jump in profits from corporate lending and a fall in provisioning for bad loans. It forecast a jump in demand for loans this fiscal as companies revive capital investments.

The bank said it will cut deposit rates in the next few weeks following the central bank's rate cut despite its strongest pillar — the proportion of the so-called low-cost CASA (current account savings account) deposits to the total — falling marginally.

The bank, said net profit rose to 1,453 crore in the March quarter, from 1,114.7 crore a year earlier. Net interest income — interest earned less interest expended — for the quarter rose 19.3% to 3,388.3 crore against 2,839.5 crore in the previous comparable quarter. — Agencies

Mumbai, April 27
India's Infrastructure Development and Finance Co is in the early stages of raising US $1 to $1.5 billion for a new fund to invest in infrastructure in the country, two sources with direct knowledge of the matter told Reuters.

The funds will be raised for IDFC Project Equity, in which Citigroup and I ndia Infrastructure Finance Co, a state-owned infrastructure finance firm, are key investors, the sources said.

The company already has a project equity fund, which manages about $930 million in roads, ports, airports and power projects.

The new fund, which is set to be launched in the second half of this year, will also invest in such projects, said the sources.

"We’ve invested nearly 80 percent of our first fund and exited a couple of investments. Now, we are looking to launch the second fund," said one of the sources.

An IDFC spokeswoman declined to comment.

The previous fund drew investors from India, the United States, Canada, Europe, Japan and the Middle East, and the new fund will target investors in the same places, one of the sources said.

The existing IDFC Project Equity fund is part of the $5 billion India Infrastructure Financing Initiative announced in early 2007 by IDFC, Citigroup, Blackstone Group and India Infrastructure Finance Co (IIFCL). The initiative was to have a $2 billion equity component and $3 billion debt portion.

However, Blackstone later pulled out of the venture.

Several private equity groups, including the 3i Group PLC and a fund jointly managed by India's State Bank of India and Australia's Macquarie Group, are on the road to raise India infrastructure funds worth a combined $4.5 billion, sources have said.

Others raising India infrastructure funds include the private equity arms of no.2 Indian lender ICICI Bank and Kotak Mahindra Bank.

Private equity investments in Indian infrastructure fell 60% to $183 million in 10 transactions during January-March quarter compared with $459 million in 16 transactions a year ago, according to industry tracker VCCircle.com, as policy concerns and slowing growth dampened sentiment.

Poor infrastructure acts as a bottleneck to India's economic growth, which slowed to 6.1% in the December last quarter, the weakest annual pace in almost three years.

India wants the private sector to invest hundreds of billions of dollars in infrastructure over the next five years. — Reuters

Chandigarh, April 27
Punjab, Kerala and Gujarat may boast of their huge nonresident Indian population but, when it comes to inward remittances, it is the NRIs from Tamil Nadu and Uttar Pradesh who are sending the largest sums of money back home.

For Western Union Money Transfer, the highest number of inward remittances are now received in Tamil Nadu, followed by Uttar Pradesh, Punjab and Andhra Pradesh. As the immigration pattern changes and more and more people from Tamil Nadu and Uttar Pradesh go for greener pastures abroad, especially to countries in West Asia, the maximum number of inward remittances are being received in these two states.

S. Paul, chairman & managing director of Paul Merchants Ltd (PML), a top money transfer agent of Western Union in the country, told The Tribune on Friday that the ticket size of remittances coming to Punjab continues to be big, mainly because most inward remittances come in dollars (from the United States and Canada) and in pounds sterling(from Britain).

“However, for us at Paul Merchants, the maximum number of remittances too are from Punjab. However, Tamil Nadu, Uttar Pradesh and Andhra Pradesh are the best emerging markets for us. This is the reason that we will be focusing on these three states when we spread out network of agents and open new offices during this year,” he said.

In the current fiscal, PML is looking at taking its agent locations in 10,000 new towns and cities, mainly in Tamil Nadu, Uttar Pradesh, Gujarat and northeastern states. The company is also looking at opening 50 new offices, mainly in the above mentioned states. In 2011-12, the company got inward remittances through 5.6 million transactions. “We registered a year on year growth of 21 per cent, which will be replicated in the current fiscal,” said Paul.

Having been adjudged as the best agent for the company in the Asia Pacific region for the last fiscal, the company is now looking at expanding its product portfolio. The compa ny has already ventured into the foreign exchange business, which earned the company a turnover of Rs 1,500 crore in fiscal 2011-12.

“Besides, we are planning to launch a PML travel card soon, which will help people traveling abroad to carry less cash and use the card for transaction,” he added. 

New Delhi, April 27
Standard & Poor’s credit analyst Takahira Ogawa listened politely as officials at the finance ministry made an hour-long pitch for a ratings upgrade, citing economic growth prospects, revenues and their efforts to contain the government's fiscal deficit.

At the meeting two weeks ago, officials argued tax returns were rising and debt levels were on the decline compared to gross domestic product, two officials who were at the meeting said. Singapore-based Ogawa gave no sign of what he was thinking — and could not immediately be reached for his version of events — but evidently he left unconvinced.

On Wednesday, the ratings agency cut its outlook on India's BBB- rating to negative from stable and warned it had a one-in-three chance of losing investment-grade status, sending shockwaves through the ministry. Its decision could raise costs for Indian borrowers and undermine foreign investor confidence in Asia's third-largest economy. "We weren’t expecting this downgrade," one senior adviser at the ministry said.

The misplaced optimism before the cut suggests the finance ministry may be out of touch with opinion among private economists, investors and even the RBI about the faltering economy. But it also reflects the view in New Delhi that India is unfairly saddled with a low sovereign rating.

In February, the finance ministry's chief economic adviser Kaushik Basu complained that India's fast growth was not reflected in global agencies' ratings. "In relative terms, India has become a better investment destination," Basu said.

As the news broke, top finance ministry officials huddled in their offices, eyes glued to monitors and television screens for signs of an investor exodus from the markets.

Finance Minister Pranab Mukherjee's first public comment on the cut — "don't panic" — seemed aimed as much at his own ministry as at the general public. While the shock news was a wake-up call, officials say the best they can do for now is take incremental steps aimed at restoring confidence in the India story.

India has lost some of its shine recently. After growing at an enviable average rate of more than 8% annually for the previous five years, it expanded less than 7% in the last fiscal year, its slowest pace in three years. — Reuters

New Delhi, April 27
Cautioning that governance concerns have weakened business sentiment in the country, the International Monetary Fund on Friday lowered India's growth projection to 6.9% for 2012. In January it pegged Indian economic growth to expand 7% for this year.

"In India, the lowered growth outlook in 2012 owes much to a slowdown of investment which partly reflects structural factors," the multilateral agency said.

The IMF called for renewed efforts to revive the "flagging" structural reform agenda. Apart from some financial reforms and measures to broaden the use of public-private partnerships announced in the 2012-13 budget, the implementation of reforms related to infrastructure is likely to proceed slowly, it noted.

IMF's Asia-Pacific Regional Economic Outlook, released today, also pointed out that domestic factors too have played a role in India's growth slowdown over the second half of 2011.

"Concerns about governance and slow project approvals by the government have weakened business sentiment, which in turn has adversely affected investment, along with cyclical factors such as global uncertainty and policy tightening...," IMF said.

However, the multilateral agency has retained India's growth estimate at 7.3% for 2013. According to the IMF, the national economy grew by 7.1% last year.

According to the IMF, steps to improve investment climate, remove infrastructure bottlenecks and expand education opportunities, are needed to boost reforms. — PTI