Financial Daily from THE HINDU group of publications
Thursday, Oct 06, 2005
Financial Daily from THE HINDU group of publications Thursday, Oct 06, 2005 |
|
|
|
|
|
|
|
Money & Banking
-
Trends Banks keen on more fee-based income Priya Nair
Mumbai , Oct. 5 MOST banks are set to see a rise in fee-based income, as interest income continues to be under pressure and profits from trading keep declining. Marketing products like mutual funds and insurance policies, offering credit cards to suit different categories of customers and services such as wealth management and equity trading, are proving to be more profitable for banks than plain vanilla lending and borrowing. As retail income continues to grow, there is immense opportunity for banks to raise fee-based income, said Mr Manish Karwa, Banking Analyst, Motilal Oswal Securities Ltd. "Banks have a huge network due to which they can get into distribution of third party products like insurance. Credit cards too are emerging as a fast source of fee income," he said. The fall in treasury income, due to volatility in interest rates, is another reason pushing banks towards fee-based income, said Ms Kanan Shah, Research Analyst, Networth Stock Broking Ltd. Private banks may see an increase of about 40-50 per cent in their fee income, while in the case of public sector banks it could be about 15-20 per cent, said Mr Karwa. "Public sector banks are shaping up, though they are not as aggressive as private banks," he said. At a recent press conference, the Dena Bank Chairman, Mr M.V. Nair, had said the bank was looking at an income of Rs 2 crore from marketing mutual funds and an income of Rs 10 crore from its tie-ups for insurance products. Bank of Rajasthan and IndusInd Bank also recently tied up with LIC for offering insurance products. Bank of India is looking to augment its fee-based income by offering money remittance through a tie-up with Bank of New York and equity trading through the broking firm Asit C Mehta, in which it has picked up stake. Fee-based income for banks increases naturally when spreads are under pressure, said Mr Ritesh Maheshwari, Director, Financial Services Ratings, Standard and Poor's.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
