Mumbai: Axis Bank Ltd, India’s third largest private sector bank by assets, is reducing dependence on large and medium companies as it seeks to cash in on an increase in individual lending opportunities in smaller towns.

The bank has set a target of increasing its retail loan portfolio to 30% of total loans, up from 21% at the end of September.

A file photo of Axis Bank, Barakhambha Road, New Delhi branch

Currently, large and mid-corporate loans make up for 55% of the bank’s loan book, which it expects to reduce in the next three years.

“In the short term, business will continue to be challenging but the long-term trend continues to be strong. The growth will come from smaller cities with metros continuing to grow,” said Jairam Sridharan, senior vice-president and head consumer lending and payments at Axis Bank.

The bank’s retail loan portfolio stood at Rs29,343 crore, or 21% of its total loan book of Rs1.4 trillion at the end of the September quarter.

Retail is one of the pillars of Axis’ vision 2015, which was adopted by Shikha Sharma after she took over as managing director and chief executive officer in April 2009.

Currently, half of the bank’s 1,200 branches are in smaller towns.

The bank also has 85 offices that do not take deposits but process loans in small towns such as Bhavnagar, Belgaum, Jhansi and Rohtak across India.

Shridharan said low penetration of home and car loans and card transactions in such towns makes it a big opportunity for banks.

“Residential real estate growth is taking a breather and so are domestic car sales. Card growth is now positive after two years of negative growth. But it is the tier-II and (tier-) III towns that are showing tremendous growth potential,” Sridharan said.

According to him, only 55% of the bank’s business currently comes from top eight cities compared to 75% three year ago.

Axis Bank’s strategy is similar to that of its larger rival HDFC Bank Ltd, which has steadily increased its retail book to exactly 50% of its loans by aggressively disbursing retail loans, feeding demand from the rural market.

HDFC Bank had lent an average of about Rs5,000 crore every month of the first quarter of fiscal 2012 to finance personal loans, commercial vehicles, auto and two-wheeler loans, which helped the bank’s retail business grow 30% year-on-year.

Axis Bank has seen a 26% compounded annual growth rate in retail loans since financial year 2007-08, giving it the confidence to increase its loan portfolio.

Currently, HDFC Bank has the largest retail portfolio after it overtook a cautious ICICI Bank Ltd, which had 60% of its loans coming from retail at one point.

Murli Gopal, research analyst at Brics Securities Ltd, said banks are focusing on retail to diversify their books in a tough economic scenario.

“Corporate loans are risky because they tend to be lumpy and one large delinquency in a scenario like this can have a negative impact. In retail, there is no such risk unless there is a systemic issue,” he said. India’s economy grew at 6.9% in the September quarter, the lowest since quarter ended June 2009.

However, banks have to have better underwriting methods before giving out these smaller ticket loans, Gopal said.

Sridharan said Axis Bank is aware of the risk management needed in selling these loans and it will follow a “conservative” policy in this regard.

“When the economy is slowing down, corporate loan demand also slows, so this is a good time to diversify for Axis which is still better placed than other private sector banks like Yes Bank Ltd who have a high dependance on corporate loans,” said Gopal, who has a ‘buy’ rating on the stock.

Axis Bank’s stock ended at Rs1,029 apiece on Monday, up 2.38% on BSE while the 30-share benchmark Sensex was at 16,805 points, down 0.25%. Local markets were closed on Tuesday.

joel.r@livemint.com

The city school district is resurrecting an old idea to help solve its most challenging and persistent problem: student performance. More than 40 of the citys schools are on the State Education Departments list of public schools in need of academic improvement.

The school board and superintendent have drafted a policy to create of zone improvement teams. The teams would be charged with reviewing academic programs and student performance in every school, and making recommendations for improvement.

There will be one team for each of the districts three zones – northeast, northwest, and south. And the five- to seven-member teams will have a combination of teachers, parents, students, school administrators, and community members, says Interim Superintendent Bolgen Vargas.

The teams can recommend broad strategic changes, such as expanding a successful program in one school to other schools within a zone, to closing a low-performing school and creating a new school. The policy, which must be approved by the school board, calls for creating the teams next year, beginning with the northeast zone.

Creating zone improvement teams was an idea Vargas helped develop when he was on the school board in the late 1990s, though it was never implemented. It was a component of the districts school choice policy, which was intended to make all schools available to all students within certain guidelines. The competition was supposed to foster better-performing schools.

But the choice program, according to the districts research, still requires some level of management. For instance, schools where the student population is predominantly poor and minority can become what educators call socio-economically isolated. The test scores of average students in these schools tend to drop without additional support.

If we want to have an effective school choice program, weve got to get control of the quality of all schools, Vargas says. We have a tendency of putting students with low performance in schools that have low selection from parents.

The boards recent decision to close School 6 helped revive interest in the zone improvement teams. School 6, which is in the districts northeast zone, will be closed for at least a year. Vargas selected the school because it is an underperforming and under-selected school.

Within a year, the team for that zone will make recommendations for the future use of the building. But the recommendations have to reflect the needs of the entire zone, which includes about 20 schools.

This will allow for a broader conversation about all of the schools, says board member Willa Powell. This way one school isnt being protected, and when you talk about closing a school, it isnt being discussed in isolation.

School 36 is on par with School 6 in terms of performance, she says. Without the recommendations of a zone improvement team, Powell says, the school choice policy can be abused.

It can be used like a blunt instrument to justify closing one school over another, she says.

Stocks clawed back much of the days earlier losses, closing mixed to lower as a sharp drop in technology shares outweighed and otherwise positive day for the market.

Technology represented the only negative sector on the Standard amp; Poors 500, but that was enough to drag the index to a modestly higher close. Utilities, consumer staples and energy performed best for the index. Big tech names also hurt the Dow industrials, and the Nasdaq lost about 1 percent for the day.

After three consecutive months of declines, the national mortgage delinquency rate increased in November, while the amount of homes entering foreclosure slightly decreased. The mortgage delinquency rate accounts for all loans currently thirty days or more past due, but have yet to enter the foreclosure process.

The amount of properties with delinquent mortgages increased to 8.15% in November, from 7.93% in October, according to a recent report by Lender Processing Services (LPS). This accounts for a total of about 4.14 million properties with mortgages 30 days or more past due, and about 1.8 million homes that are delinquent 90 days or more.

However, the total amount of homes entering the foreclosure process decreased from 2.21 million in October, to about 2.11 million in November, a decrease of almost 100,000 properties.

Therefore, the total amount of homes entering foreclosure, or are now 30 days or more passed due, is 6.26 million, down from 6.298 million the month prior.

The report shows that Florida, Mississippi, New Jersey, Illinois, and Nevada have the largest amount of delinquent loans (including those entering foreclosure), while Wyoming, Alaska, North Dakota, Montana, and South Dakota have the lowest amount of delinquent mortgages in the nation.

A few weeks ago we reported that the total amount of underwater mortgages decreased in the third quarter to a total of 10.7 million properties, or a little more than 21 percent of all homes attached to a mortgage.

–>

Lending at PNC Bank, especially to business borrowers, has risen significantly this year, CEO James Rohr told analysts Tuesday.

New business loans increased by about $3.6 billion in the three-month period ended Sept 30 compared to previous quarter ended June 30 said Rohr, CEO of bank parent PNC Financial Services Group. Consumer loans increased by about $500 million.

We continue to see loan growth, said Rohr at the Goldman Sachs Financial Services conference in New York. He noted commercial real estate lending also has risen in recent weeks.

PNC wrote more business loans last quarter than originally planned, he said, and is experiencing growth in all of its 33 markets and across various industries. The bank also is on track to pick up some 1,200 new business borrowers in 2011, compared with an initial target of 1,000.

This years mayoral election brought up topics of zero-based
budgeting, efficiencies in the city, cutting red tape for
businesses, and creating a procurement code thats reliable. Now,
before the new mayor has even stepped in, some City Council members
are taking a deeper look at all of those issues.

Whats happening right now is everybody seems to be gravitating
toward one or two of the reform issues they feel are important,
said Councilman Sal DiCiccio, who is forming a group, along with
Councilman Tom Simplot, to cut red tape. Those are all important
reforms that Ive been talking about for two years now.

DiCiccio and Simplot have a goal to get their committee cutting red
tape as soon as possible, and have the first changes brought to the
city in 60 days. Their committee is the newest in the city focused
on reform.

Jim Waring is working on procurement, Bill Gates is looking at
efficiencies, and Vice Mayor Thelda Williams is working on a
zero-based budget.

As a state senator for several years, I tried to focus on three
issues that were my big things, Waring said. While I may focus on
procurement, Im certainly working on other issues as well. Theres
at least a couple of us trying to divvy up the work a little bit.
You try to be the expert in those issues. If you try to be the
expert in all issues, youre going to have a problem. Theres not
enough hours in a day. This is all stuff I worked on as a state
senator, so its sort of carrying over.

Waring is hoping that a year from now the city will have changed or
improved three major things about procurement. He would like to see
complaints about the system sent to someone other than those
running it, Phoenix-based businesses have some advantage over
out-of-state businesses and theres more uniformity in the way
things are run.

Waring said hes talked to the new mayor, Greg Stanton, about this
issue and hopes it will get some attention in the coming year.
Stanton did say during his campaign that he is opposed to a
one-size-fits-all approach to a procurement code, but the process
in general is something that needs adjustment.

He has asked me if I had any special requests for subcommittees,
Waring said. Realistically, I feel like committees are a way to
not do anything – its not. I hope a year from now well have
settled a lot of the issues at the city, and well have a firmer
financial sitting.

Gates has been working on creating more efficiencies within the
city for a year, and says its an ongoing process.

I think for me, coming from the private sector, Ive always been
focused on efficiencies and its something the private sector had
to focus on quicker than government, just given the profit motive,
Gates said. To see that translated into government I saw as a real
challenge, and Im very pleased with what weve been able to do so
far. Were certainly not done.

Gates is also waiting on word from Stanton as to whether or not his
committee will be allowed to continue, but finding efficiencies is
something Stanton did outline as an important issue. Stanton
suggested combining some departments within the city, for example,
something Gates committee has already been working on.

Williams is working on the final reform act, something DiCiccio
says could be the biggest zero-based budgeting.

If Thelda gets her process through it will be known as the best
budget anywhere in the country, and the most transparent, DiCiccio
said. I saw what she helped put together, and it was already
considered to be the best.

Williams was not available for comment on where the process is at,
but a zero-based budget would allow residents and the council to
search over the budget line-by-line to determine what is necessary.
It would force departments annually to add up costs they need,
rather than starting with the past years budgeting and adjusting
that. DiCiccio hopes the city will honestly accept the idea.

There seems to be an early commitment to get these things
through, DiCiccio said. The goal is to be the best, not one of
the best. Not to be better, but the best at everything we do. If we
can move these four critical reform components forward, thats real
substantive, youll see a much better, stronger city, and well
create more jobs in the private sector.

Contact writer: (480) 898-7914 or
ahurtado@ahwatukee.com

The loans came to light after Issa handed Bank of America a pair of subpoenas shortly after becoming committee chairman in the beginning of 2011. The bank purchased the mortgage lender in 2008, and has since had to pay $8.5 billion to settle investors claims that it and Countrywide sold low-quality mortgages that failed when the housing market collapsed.

The subpoenas have yielded roughly 100,000 documents, Issa said, and they reveal that Countrywide used its VIP program to build relationships with government officials and others positioned to advance Countrywides business interests. Other questionable recipients include up to 173 employees of Fannie Mae and Freddie Mac, including some in senior management positions.

Issa added that it is possible that other lawmakers received special benefits from Countrywide.

This does not mark the first time Countrywides reach into the halls of Congress have come under scrutiny. The lenders Friends of Angelo program was scrutinized by Congress last year after it was revealed the program was utilized by lawmakers and other government officials.

The Senate Ethics Committee examined and ultimately cleared retired Sen. Chris Dodd (D-Conn.) and Senate Budget Committee Chairman Kent Conrad (D-ND) for receiving loans through the program. Both lawmakers denied any wrongdoing and said they did not ask for preferential treatment. Angelo is a reference to Angelo Mozilo, Countrywides former CEO.

In 2010, Mozilo paid a record $22.5 million penalty to settle charges with the Securities and Exchange Commission (SEC) that he and other ex-Countrywide executives misled investors as the subprime mortgage crisis developed. He also is barred from ever again severing as an officer or director of a public company.

ByKirk Haverkamp
Provided by

Books are always a popular item at Christmas. Since were all about mortgages and personal finance here, we thought wed put together a list of some of the more popular mortgage-related books for consumers this year.

FAIRFAX, VIRGINIA, Dec 21, 2011 (MARKETWIRE via COMTEX) –
CGI Group Inc.

/quotes/zigman/11421/quotes/nls/gib GIB
+0.59%

/quotes/zigman/11436 CA:GIB.A
0.00%

, a leading provider of
information technology and business process services, today announced
that the State of Vermont’s Office of Budget and Management selected,
through a competitive evaluation process, CGI’s public sector
performance budgeting solution to replace its aging budget system and
integrate with the State’s existing enterprise resource planning
(ERP) platform.

Vermont sought a vendor partner that could provide a comprehensive
range of budgetary capabilities including budget development, revenue
planning, position and salary forecasting, and performance management
as well as statewide consolidation, adoption, and revision
capabilities. As part of CGI’s AMS Advantage ERP suite, the
performance budgeting solution offers flexible and configurable
budgeting functionality that meets the unique needs of the public
sector without time consuming and costly customizations. The open
architecture supports integration with Vermont’s existing ERP system
and allows for statewide reporting that is timely, accurate, and
reliable. Both U.S. State and Local as well as U.S. Federal clients
use CGI’s state-of-the-art budget tool to gain better visibility into
and control of their complex, multi-entity budgets.

“CGI has pioneered performance budgeting in the public sector and our
solution has a rich heritage of successful implementations,” said
Daniel Keene, Vice-President of CGI’s AMS Advantage program. “We are
proud to welcome the State as a new client in the CGI public sector
ERP user community and look forward to delivering a powerful
budgeting solution capable of supporting Vermont’s current and future
business needs.”

About CGI’s AMS Advantage

From states, cities, counties and school districts, CGI’s AMS
Advantage ERP solution works for government at all levels and has
helped public sector clients better serve 90+ million citizens.
Designed specifically for state and local government and available in
the cloud, the solution incorporates CGI’s 35 years of expertise and
experience in the public sector market. AMS Advantage helps
governments achieve the highest level of accountability while
enhancing services to their constituents through integrated
functionality, workflow and configurable processes. The result is
significantly increased efficiency, improved access to information
and reduced total cost of ownership.

About CGI

Founded in 1976, CGI Group Inc. is one of the largest independent
information technology and business process services firms in the
world. CGI and its affiliated companies employ approximately 31,000
professionals. CGI provides end-to-end IT and business process
services to clients worldwide from offices and centers of excellence
in Canada, the United States, Europe, and Asia Pacific. As at
September 30, 2011, CGI’s revenue was $4.3 billion and its order
backlog was $13.5 billion. CGI shares are listed on the TSX (GIB.A)
and the NYSE (GIB) and are included in both the Dow Jones
Sustainability Index and the FTSEXGood Index. Website:
www.cgi.com .

www.cgi.com/newsroom

Contacts:
Investors
Lorne Gorber
Senior Vice-President, Global Communications and
Investor Relations
lorne.gorber@cgi.com
514-841-3355

Media
Linda Odorisio
Vice-President, US Communications
linda.odorisio@cgi.com
703-267-8118

SOURCE: CGI Group Inc.

mailto:lorne.gorber@cgi.com
mailto:linda.odorisio@cgi.com

Copyright 2011 Marketwire, Inc., All rights reserved.

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GIB

CGI Group Inc. Cl A

$
18.75

+0.11
+0.59%

Volume: 53,034
Dec. 27, 2011 4:03p

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CA:GIB.A

CGI Group Inc. Cl A SV

$
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Volume: 316,503
Dec. 23, 2011 5:40p

NEW YORK, Dec. 21 (UPI) — US stocks closed mixed Wednesday as investors pulled back after Tuesdays strong advances, with Nasdaq taking the brunt of it.

Stocks turned lower despite an increase in existing home sales. The National Association of Realtors said sales rose 4 percent from October to November.

By close of trading on Wall Street, the blue-chip Dow Jones industrial average added 4.16 points, 0.03 percent, to 12,107.74. The Standard Poors 500 index gained 2.42 points, 0.19 percent, to 1,243.72. The tech-dominated Nasdaq composite index gave up 25.76 points, 0.99 percent, to 2,577.97.

On the New York Stock Exchange, 1,871 stocks advanced and 1,171 declined on a volume of 3.4 billion shares traded.

The benchmark 10-year treasury note fell 13/32 to yield 1.972 percent.

The euro fell to $1.3046 from Tuesdays $1.3082. Against the yen, the dollar rose to 78.09 yen from Tuesdays 77.89 yen.

In Tokyo, the Nikkei 225 index gained 1.48 percent, 123.50, to 8,459.98.

In London, the FTSE 100 index gave up .055 percent, 29.86, to 5,389.74.