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Volume: X

January, 2008

 

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Financial Services

Share Prices

 

 

 

 

 

 

Sales and Market Share

Banks

 

 

Source: Indian Banks’ Association

 

 

23. PSBs Lose Market Share To Private Peers – January 15

Market share of PSBs continues to fall, while private sector banks strengthen their position

According to figures released by the Reserve Bank of India (RBI) for the quarter ended September 2007, the combined market share of public sector banks (PSBs) continued to fall, while private sector banks further strengthened their position. The State Bank of India (SBI) group, which includes SBI and its associates, gained its market share in deposits but lost out on credit share during this period. As a group, they accounted for 47.9% of the aggregate deposits, compared to 47.7% in quarter ended June 2007 and 50.6% in 2002. The share of private sector banks in aggregate deposits was 20.3%, up from 16.6% in 2002. For the same period, the credit-deposit (C-D) ratio of commercial banks and foreign banks stood at 71.5% and 79.9% respectively. For SBI and associates and other scheduled commercial banks, the C-D ratio was 72.5%.

 

Source: The Economic Times

 

 

 

Mutual Funds

 

 

 

Source: Association of Mutual Funds of India

 

 

 

Trends, Marketing Initiatives and Others

Banks

 

 

 

24. Banks With Global Ambition Must Have India Presence: E&Y – December 19

Presence in emerging economies is a must for foreign banks: E&Y

According to a report by international consultancy firm Ernst & Young, banks aspiring to become global must have a presence in India and other emerging economies, which are set to become a major source of financial sector revenue and profit growth. Titled ‘Strategic Business Risk 2008 — the top 10 risks for business,’ the report noted that a late entry into Asia would make it difficult for foreign banks to keep up with competition. It also stated that rapid transformation from “government bureaucracies into corporate governance and transparency-driven organisations” is one of the main threats facing the Asian banks.

 

Source: The Economic Times

 

 

 

25. List Of Re-Branding Banks Grows – January 02

Indian banks witness an image makeover

Indian banks are working towards not only increasing efficiencies but also shedding their dull public-sector branding to meet the post-2009 situation, when foreign banks will have access to more organic and inorganic growth in the country. In 2007, private sector banks such as Catholic Syrian Bank, Bank of Baroda (BoB), Jammu & Kashmir Bank and South Indian Bank had an image makeover and currently Canara bank is following the same. According to banking experts, the new identity helps draw new customers as well as help in changing public perception.  With more than half of the country being 25-years-old or less, the banks are adopting young look to allure this segment.
 

Source: DNA

 

 

 

26. Mass Market To Fuel Wealth Management Services – January 05

Indian wealth management industry to have AUM of $1 trillion by 2012: Report

According to Celent, a Boston-based financial research and consulting firm, the Indian wealth management industry is growing at 30% per annum and is expected to have assets under management (AUM) of $1 trillion by 2012. According to the report, the Indian wealth management business has moved from safeguarding wealth to growing wealth, and there is a momentum towards more sophisticated customer segmentation, products and delivery channels. The wealth management services market in India is broadly segmented into the mass market (investable surplus $5,000 to $25,000), the mass affluent ($25,000 to $1 million), the high net worth or HNW ($1 million to $30 million), and the ultra-high net worth or ultra-HNW (greater than $30 million) categories. Celent expects the mass market and mass affluent segments to grow at 27% and 30% respectively, in next five years.

 

Source: DNA  

 

 

 

27. Banks' Retail Loan Quality Seen Falling In India: CRISIL – January 08

Asset quality of retail loans may deteriorate as lenders increase exposure to higher risk

On 8 January, 2008, CRISIL said that asset quality of retail loans in India may deteriorate in the coming months as lenders are increasing exposure to higher risk customers and interest rates are rising. Gross non-performing assets (NPA) in retail loans are estimated to increase to 4% by 2010 from 2.7% in March 2007. CRISIL categorised personal loans and credit card receivables, which comprised 17% of total outstanding retail loans in March 2007, as high risk. Increased competition in lending has led companies to reach out to untapped clients, such as the self-employed and borrowers from smaller cities thereby increasing their exposure to risk. However, the situation remains manageable because secured loans such as mortgage and vehicle loans account for 80% of lenders' retail loan portfolio.

 

Source: The Economic Times

 

 

 

28. Finally, PNB ATM On Delhi-Agra Shatabdi – December 29

Railway department consents to the proposal for ATM on trains

The Indian Railways has consented to the proposal of installing automated teller machine (ATM) facility on moving trains. Initially, Punjab National Bank (PNB) will install an ATM on the Delhi-Agra Shatabdi Express, which is likely to be operational by 15 February, 2008.

 

Source: The Financial Express

 

 

 

29. Banks Told To Go Green – December 21

RBI asks banks to develop a plan of action towards environmental issues The RBI has asked banks, with the approval of their boards, to consider issues such as carbon dioxide emission and consumption of ozone-depleting CFCs and develop a suitable and appropriate plan of action towards helping the cause of sustainable development. The RBI also advised the banks/financial institutions to keep themselves abreast of the developments on an on-going basis and dovetail/modify their strategies/plans in the light of such developments.

 

Source: The Financial Express

 

 

 

Insurance

 

 

 

30. ‘Insurance Sector To Touch Rs 2 Lakh Crore By 2010’ – December 25

Insurance sector to grow by over 200% by 2010: ASSOCHAM

According to ASSOCHAM, with the entry of new players and increasing penetration, the insurance sector is expected to reach the Rs 2,00,000 crore mark by 2010. According to the study titled ‘Insurance in Next Two Years’, present size of the insurance sector is estimated at Rs 50,000 crore. For the same period, the insurance sector, both life and non-life, is forecast to grow by over 200%, whereas private insurers will achieve a growth rate of 140%.

 

Source: The Financial Express

 

 

 

31. Life Insurers’ Club To Swell, Market To Consolidate – January 05

The life insurance business in India to touch Rs 3,59,000 crore by 2011

The life insurance business is expected to reach Rs 3,59,000 crore by 2011, as nearly 18-20 new entrants are expected to enter the insurance sector in 2008. The subsequent competition is expected to lead to innovative products and a higher rate of penetration. According to analysts from ICICI Securities and Fox Pitt Kelton, India is the fifth largest insurance market in Asia and approximately 85% of the insurance business conducted in the country is related to life insurance. Rising income levels along with a growing middle class with smaller family sizes, are the target audience of most insurance companies.

 

Source: DNA

 

 

 

32. ICICI Lombard To Launch Weather Insurance Product – December 25

ICICI Lombard to expand its index-based weather insurance products across India

The private sector general insurance company ICICI Lombard General Insurance plans to expand its index-based weather insurance products across India. The product had already been introduced in the 52 districts falling under nine states of the country earlier in 2007. Currently the product is being sold in states such as Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Andhra Pradesh, Tamil Nadu, Chattisgarh, and Rajasthan.

 

Source: The Financial Express

 

 

 

Others

 

 

 

33. Indiabulls Ties Up With French Insurance Company – December 29

Indiabulls ties-up with Sogecap

Indiabulls Financial Services has tied up with Sogecap, the insurance   arm of French financial major Societe Generale (SocGen). Sogecap is the third largest insurance company in France and has presence in 10 countries. Indiabulls Financial Services will have a 74% stake in the joint venture.  The JV plans to capture 2-3% of the domestic life insurance business by 2010, which is expected to grow to Rs 2 lakh crore by that time.

 

Source: DNA

 

 

 

Product Launches

Insurance

 

 

 

34. Tata AIG Unveils Plans For United Bank Customers – December 19

On 18 December, 2007, Tata AIG Life Insurance Company Ltd (Tata AIG Life) launched

‘United Child Solutions’, a range of insurance offerings for the customers of United Bank of India. It is available in three variants: Educare 18, Educare 21 and Career Builder Plan.

 

 

 

Others

 

 

 

35. Bajaj Capital Launches Online Investment Platform – January 04

On 3 January, 2008, Bajaj Capital, a diversified financial and investment advisory house, announced its foray into online investment and stock broking services through the launch of a technology platform by the name ‘Just Trade’.

 

 

 

36. Reliance Money To Launch Portfolio Management Service – December 20

On 20 December, 2007, Reliance Money, a subsidiary of Anil Ambani group company Reliance Capital, announced its plans to start Portfolio Management Services (PMS) targeting people with an investment limit of between Rs 5 and Rs 75 lakh. The PMS will start from 15 January, 2007.

 

 

 

Advertising Campaigns

 

Insurance

 

 

 

37. Aviva Invites People To Live ‘Life Khul Ke’ – December 31

Aviva launches a TVC emphasizing the brand philosophy of ‘Living life khul ke’

Aviva Life Insurance’s new TVC, featuring brand ambassador Sachin Tendulkar, reinforces the brand philosophy of ‘Living life khul ke’. Created by the creative agency Publicis India, the objective of the campaign is to create realisation among the 30-35 year olds about the need to start planning their retirement at an early age. It highlights Aviva’s overall brand philosophy by portraying a successful executive’s unfulfilled desire of opening a book store. He is encouraged by brand ambassador Sachin Tendulkar, who advises him to act now by investing in Aviva’s Retirement Solutions to fulfill his dream much before he turns 60. In addition to television, the company plans to use other media such as print, radio, outdoor and internet.

 

Source: Exchange4media

 

 

 

38. No Worries, No Fear, When LIC Is Here’, Sounds All Too Familiar, But Works – January 15

LIC launches new TVC titled ‘Na chinta, Na fikar; Na hai koi darr’

Life Insurance Corporation of India (LIC) launched a new TVC, with a proposition of ‘Removal of fear’. The TVC, which went on air on January 12, 2008, has been conceptualised to showcase the bouquet of services offered by the company and shows different phases of life where LIC works as a safety resource. The commercial is shot with the backdrop of circus and roller-coasters to signify the highs and lows experienced by all in life.

 

Source: Exchange4media

 

 

 

39. That Sinking Feeling: Rediffusion’s Strategy For A Financial Brand – January 14

ING Vysya Life Insurance launches a new TVC

ING Vysya Life Insurance (IVL) launched a new TVC communicating its brand premise, ‘Experience the Joy of Fulfilling Your Responsibilities’. The TVC attempts to strike a balance between joy and trepidation and shows the two emotions through several instances.

 

The TVC, created by agency Rediffusion DY&R, starts with the shot of a South Indian wedding in which the bridegroom is being congratulated by his friends and relatives.

 

Suddenly, the groom ‘sinks’ a little into the ground, burdened by the financial obligations and responsibilities that his future now holds for him. A jingle explains the “joy of the moment and the realisation of responsibility”. The next shot shows a daughter revealing the news of her admission into an MBA programme to her father. He is overjoyed, but simultaneously feels the weight of his responsibility.
 

Last is the shot of a young man holding his newborn baby for the first time, while the ground beneath him cracks.

 

At this point, the ING Vysya Life Insurance advisor enters and tells him that with the help of IVL, he need not fear. The film ends with the couple coming out of the ING Vysya Life Insurance office and taking a confident step forward, with the tagline saying, ‘Mera Farz’.

 

The target group (TG) for IVL in the insurance category, is males in the age group of 25-44 years, while the secondary TG is women in the age group of 25-44 years.

 

Source: Agencyfaqs