State Bank of India (SBI) has reported a net profit of £231.2 million for the quarter ended June 2019, as against a loss of £487.6 million in the corresponding quarter in the previous year. During the quarter under review, the bank’s deposit grew only 7.3% to £294.8 billion as it pursued a strategy of selling its holding of surplus government bonds to fund credit. Net advances grew 13.8% to £294.8 billion. Investments dropped 11% to £94 billion. SBI chairman Rajnish Kumar said that the focus was on increasing core operating profit (pre-provision). “Here, we have been successful as pre-provision growth in operating profit has risen 32%,” said Kumar. On subsidiaries, Kumar said that SBI General would file for an IPO next year as talks were on for exit of foreign partner IAG. SBI Cards is targeting an IPO in the fourth quarter of the current fiscal. He said that the bank has permission to raise £2 billion of equity and £700 million of bonds.
DoT working on proposal to merge MTNL, BSNL
The department of telecommunications (DoT) is “working on” a proposal for merger of cash strapped BSNL and MTNL, as part of efforts to revive the ailing state-owned telecom firms, a source said. The source said their merger is “one of the many components” of the overall revival plan being worked out for the two corporations, and that a final call on the matter will be taken by the Cabinet. The move assumes significance as the distressed telecom PSUs have been making losses and have faced challenges in clearing staff salaries. “Merger is one of the many components of the overall revival plan because clearly MTNL cannot stand by itself. Finally, the Cabinet has to take a view on that,” the source said, adding that the plan entails MTNL being merged with BSNL. MTNL provides telephony services in Delhi and Mumbai, while BSNL is present in the rest of the circles.
Rishad Premji takes over as Wipro chairman
Rishad Premji took charge as the chairman of Wipro last week. He takes over from Azim Premji who retired as chairman on July 30 after an eventful innings at the helm, transforming a small cooking oil company that his father started in 1945 into a $25-billion global IT powerhouse. Till recently, Rishad was the chief strategy officer leading Wipro’s M&As and was the brain behind Wipro Ventures - a $100-million fund to invest in startups developing technologies and solutions that will complement Wipro’s businesses with next-generation services and products. “Rishad brings to this role new ways of thinking, broad experience, and competence that will lead Wipro to greater heights. He has been an integral part of the leadership team since 2007, and has a deep understanding of the company, its business strategy, its culture and its heritage. He is also completely committed to the values which form the bedrock of Wipro,” Premji senior said at the company’s AGM held in Bengaluru in July.
Auto industry in doldrums
The pain in the auto industry has just exacerbated. Sales of cars and SUVs - that saw their worst quarterly fall since 2000-01 in the just-ended April-June 2019-20 period - crashed yet again as companies such as Maruti Suzuki and Honda saw some of their steepest declines in recent years. The situation remains equally grim for two-wheeler makers where all the top players - Hero Moto, Honda Motorcycle and Scooter India (HMSI), TVS and Royal Enfield - fell by double digits, clearly bringing out the pain in both urban and rural markets. What is alarming for the industry is that this decline comes on an already-weak base. Sales of passenger vehicles (cars and SUVs) had started their downward spiral in July last year and save for October 2018, the numbers have been coming down every month since then. Also, the subdued sentiments in the market prevail even when companies are offering attractive discounts and freebies to lure buyers as the industry prepares for stricter BS6 emission norms from April next year.