Federal Bank Blog

Unofficial Federal bank Blog. This blog is created for investor's information only,information on this blog may or maynot be correct.

Saturday, February 04, 2006

SC rejects to stay HC order on Federal, Ganesh Bank amalgamation

The Supreme Court on Jan 30 declined to stay an interim order passed by the Bombay High Court on January 27 staying the merger of Federal Bank Ltd with Ganesh Bank of Kurundwad in Maharashtra. A three-judge Bench comprising the Chief Justice, Mr Y.K. Sabharwal, Mr Justice C.K. Thakker, and Mr Justice R.V. Raveendran, declined to interfere with the High Court order when counsel for Federal Bank `mentioned' the special leave petition (SLP) against the High Court order for early listing and an interim stay.

The Bench told the counsel that it was only an interim order and the High Court had posted the matter for hearing on February 14. The Bench asked the counsel to participate in the hearing in the High Court. The High Court had stayed the merger on a petition filed by a group of persons including the Ganesh Bank Chairman, a shareholder, a depositor, and an employee challenging the Government orders of moratorium and subsequent merger. The SLP is directed against this order.

Federal Bank GDR to register on London Stock Exchange on Feb 2

The Federal Bank GDR, which mobilised close to $80 million, is slated to list at the London Stock Exchange on Feb 2. While the issue of 18 million Global Depository Receipts realised $71.46 million, the green shoe option of 2 million GDR was also fully subscribed, bringing in a total of $80 million to the bank. The GDR, each representing an underlying equity share, were priced at $3.97 each working out to approximately Rs 175 per share. While universally there is a good demand for Indian paper, the response to the bank's GDR issue was very positive. The demand for the bank's GDR was to the tune of $601 million, an over-subscription of 7.5 times. Some 60 institutional investors, including some top names in the international market Fidelity, Franklin Templeton, HSBC Asset Management Company, Dubai Bank and GE Asset Management Company subscribed to the issue.

Federal Bank is the first and only old-generation private sector bank to have successfully undertaken a GDR issue. Subsequent to the issue, the share capital of the bank is slated to go up from Rs 65.6 crore to Rs 85.6 crore. The ICICI Bank holding in the bank, which is currently around 10 per cent,is expected to decline to 7.5 per cent. The GDR issue would mobilise Rs 350 crore to the bank, including the premium. Going by the overwhelming response to the issue, the GDR should be listing at the European bourses at a premium. Over 75 per cent of the bank's equity is listed on the Indian bourses, sources in the bank said. Federal Bank share closed lower at Rs 180.80, from the previous close to Rs 185.

Federal Bank mops up $71.46mn via GDR

Federal Bank has raised $71.46 million through a GDR issue. The transaction, which involved the issue of 18 million Global Depository Receipts, has not taken into consideration the possibility of over-allotment option, extending up to an additional two million GDRs. The GDRs, each representing an underlying equity share, were priced at $ 3.97 each approximately working out to Rs 175 per share. The GDR would be issued on the Professional Securities Market of the London Stock Exchange, Federal Bank said in a statement. Citigroup and Merrill Lynch were the joint book runners and lead managers to the issue.

UBS, EFF acquires stake in FedBank

UBS Securities Asia Ltd, the Hong Kong-based investment arm of the Swiss financial power house, UBS, and Emirates Family of Fund (EFF) promoted by the UAE-based Emirates Bank Group (EBG), have picked up less than 5% stake each in Federal Bank Ltd from the open market. This assumes significance as it comes at a time when ICICI Bank, the single largest stakeholder in the Kochi-based bank, is divesting its stake in tranches to bring down its holding to less than 5% to comply with the Reserve Bank of India (RBI) norms. Federal Bank does not have a domestic or foreign promoter and ICICI Bank originally held over 21% stake in the bank. It has recently diluted close to 10% stake in Federal Bank in the open market and leading foreign institutional investors FIIs) Goldman Sachs Investments and Kuroto Fund had picked up a sizeable chunk of its shares.

UBS Securities had acquired 31,48,944 shares aggregating 4.81% stake of the FedBank from the open market. UBS has reportedly bought these shares in tranches at market prices. Similarly, the EFF has also bought 22,54,20 floating shares aggregating 3.44% of the Federal Bank through open market operations. Following this, the total FII holdings in the bank has touched 26.43% in the December quarter compared to 15.5% in the previous quarter. UBS and EFF have been buying Federal Bank stocks for quite some time. UBS will have to soon make a public announcement as per the Sebi guidelines about its positions in the counter as its holding may soon cross the 5% mark. UBS is seen as a strong contender for a controlling stake in Federal Bank. Rumours were also doing the rounds that the UAE-based Emirates group was keen to get a controlling stake in Federal Bank, which has substantial business from the non-resident Indians (NRIs living in the middle east). Federal Bank is one of the largest old generation private banks in the country. It has clocked a profit of close to Rs 72 crore for the quarter ended December 2005 over a turnover of Rs 352 crore.

Federal Bank join hands with SBI Life for home loans insurance

Federal Bank has tied up with SBI Life Insurance to provide home loan insurance for its customers. Federal Bank chairman and managing director M Venugopalan after the strategic tie up said the bank had a good home loan customer-base and with the new tie up it planned to expand the base and raise its business to around Rs 2,000 crore by the end of this fiscal from Rs 1,400 crore.

The policy would be available and the new customers by paying a one-time premium of around Rs 25 as part of the monthly EMI for a customer of 35 years of age. The plan would be available for those in the age group of 18 to 60 years and cover would be available up to 71 years. SBI Life has the product specifically designed and customised to safeguard the interests of the home loan borrowers.

History

YEAR EVENTS 1931 - The Bank was incorporated in 1931 as Travancore Federal Bank Limited to cater to the banking needs of Travancore Province by a small group of local citizens. It embarked on a phase of sustained growth under the leadership of K.P. Hormist. The bank along with six other banks co-promoted Bharat Overseas Bank Ltd.

1949 - The Board of Directors of the Bank was reconstituted and fresh Articles of Association were adopted and the Bank was renamed as The Federal Bank Limited.

1993 - During March, the bank issued 25,25,000 No. of equity shares of Rs 10 each at a premium of Rs 25 per share in proportion 1:2. Another 5,25,000 No. of equity shares were offered to the employees on an equity basis. Only 30,47,894 shares of the above taken up (2,106 shares kept in abeyance). Another 30,00,000 No. of equity shares were allotted at a prem. of Rs 30 per share to ICICI associates companies.

1994 - During March, the company offered to the public 35,45,500 shares at a prem. of Rs 80 per share. Additional 1,72,600 shares were allotted to retain oversubscription. During January 1996, the bank issued 74,08,122 rights equity shares (prem. Rs 140; prop. 1:2) 73,51,734 shares taken up.

1995 - 50,50,000 No. of equity shares were issued and paid-up of which 3,318 No. of equity shares were issued for consideration other than cash on 27.1.1965 to shareholders of erstwhile St. George Union Bank Ltd., Puthenpully, Kerala.

1996 - The Company undertook as 3 year Information Technology Strategic Plan 2000 for automating its branches in a phased programme.

1997 - The bank has developed "Fedsoft" the automation software package in-house which is being used by 40 branches. An Automatic Teller Machine (ATM) was installed at the Vile Parle branch in Mumbai during the year.

- The bank is the second largest private sector bank with a network of more than 360 branches which till recently was restricted to the southern States.

- The Aluva-based Federal Bank Ltd. has set up its site on the World Wide Web on the Internet, Information about the bank and its products and services can be accessed form http://www.federal-bank.com.

- Federal Bank has infused an additional Rs.10 crore in the equity capital of its investment banking subsidiary, Fedbank Financial Services in 1996-97.

- The Federal Bank Limited, the largest scheduled bank in Kerala, had developed its own computer software named FedSoft.

- The software was developed by the bank in collaboration with Datanet Corporation, Bangalore and the package was based on state-of-the-art technology and the latest workflow concepts.

- Industrial Credit and Investment Corporation of India (ICICI) has entered into a strategic alliance with two Kerala-based private sector banks-Federal Bank Ltd (FBL) and South Indian Bank Ltd (SIBL)-to share business interests and strategies.

- Federal Bank Ltd, the largest scheduled bank in Kerala, with a network of over 350 branches throughout the country.

- The Federal Bank Limited, the largest private sector banking network in the country, has taken over an Abu Dhabi-based financial institution Exchange Bank dealing in foreign exchange.

- The Federal Bank, the largest banking network in India in the private sector, is working on various customer-friendly schemes in the wake of the liberalisation globalisation measures unleashed by the government.

1998 - The Federal Bank Limited has launched a new deposit scheme named Fed Flexi.

- The Kochi-based Federal Bank will open 100 more branch spread across the country by the turn of the century. With this, the total branch strength of the bank will cross 500.

- The Alwaye-based Federal Bank has launched three tailor-made loan schemes.

1999 - As part of its plan to widen the retail credit portfolio, the Aluva-based Federal Bank has launched three new schemes to promote travel and tourism, fund short and long-term needs of the trading community and to finance payments of premium of LIC's Bima Nivesh.

- Federal Bank, one of the country's old private banks, opened its first specialised branch for asset recovery in Mumbai on December 16, '99.

- The Bank has also set up a target of Rs 86 crore in the current year for the recovery of the non-performing assets (NPAs).

- The bank has set up an asset recovery department at it corporate office at Alwaye and strengthened asset recovery cells at regional offices.

2000 - Federal Bank is to foray into internet banking and E-commerce in the month April. The Bank will be he first among the old private sector banks in the country to diversify into internet banking.

- The Bank has entered into marketing pacts with some commercial agencies for its E-commerce business.

2001 - The Aluva-based Federal Bank has tied up with Escotel Communications to launch mobile banking services using SMS technology.

- Federal Bank has launched a new deposit scheme christened as `Suraksha' for senior citizens.

2003

-Unveils Anywhere Banking provides the convenience of doing transactions from 300-plus interconnected branches

-ICICI Bank divests 0.31% stake in Federal Bank.

-Federal Bank cuts Home loan interest rates.

2004

-Achieves 100% interconnectivity among all its branches

-Launches Equity Subscription Scheme, a new retail product for financing the IPOs and public issue applications of its customers

-Acquires a prime property in Chennai-owned by Ramco Super Leathers under Securtisation and Reconstruction of Financial Assets and Enforcement of Security Act. The property, spread over six grounds and 26,000 sq ft on Anna Salai, is estimated to have a market value of Rs 16 crore.

-Federal Bank unveils treasurer's calendar

-Federal Bank join hands with ICICI Prudential Life Insurance Co. Ltd. for premium collection through its branches

-Federal Bank introduces new Fed e-Pay services

2005

-JRG Securities Ltd has forged alliance with Federal Bank Ltd for providing loans for subscribing to initial public offers (IPOs).