Fifty-fifty, is what the ratio between fee and non-fee based incomes currently stands at for Bank of America.
The bank, under the leadership of Vishwavir Ahuja, has to date, a credible zero per cent non-performing asset and is expected to maintain the same in this fiscal as well.
?Good asset quality, keen focus on client selection, and stringent underwriting standards, with a robust risk management system, helps us keep a check on our NPAs,? says Ahuja, managing director and chief executive officer (CEO) of the bank.
Commencing its India operations way back in 1964, the bank, as a business strategy, does not want to foray into retail banking, and will restrict itself to the current five metro offices in New Delhi, Kolkata, Chennai, Mumbai, and Bangalore.
?Cash management, demand deposits coupled with a good corporate banking business, and the treasury business is helping the bank do well in India,? Ahuja says.
Besides, the bank is in a position to operate efficiently within the five branches it has, he adds.
The bank is into specialised services and has carved out niche areas of corporate and investment banking, global product services, treasury, debt capital markets, risk management, and operations to stand out in the crowd.
?We are very selective in our client segmentation,? says Ahuja.
Net interest incomes of the bank have risen from Rs 200 crore on March 2006 to Rs 250 crore in March 2007.
The bank?s revenues during the period were higher by 24% at Rs 674.4 crore, while profits after tax were higher by 35% at Rs 195.5 crore for the year ended March 31, 2007.
The bank is looking forward to its March 2008 results, which are expected to be better than the previous year.
As for other business opportunities, the bank has scaled up its domestic activities in India in depository services, funding, fixed income, and fee-based services in the current year, given the increase in market opportunities relative to cross border ones, the limitations on external commercial borrowings, and uncertainties in the global financial markets.
?Despite a slowdown in the overseas fund raising exercise for Indian corporates, we expect a better performance in the current fiscal (FY 07/08) year than the previous year, and expect a good growth in both, fee-based and non fee-based incomes,? says Ahuja.
?Supported by a very strong credit risk monitoring, capital market risk management team, we should achieve excellent results,? Ahuja said.
The bank currently has managed to acquire large institutional deposits wherein a significant proportion is current accounts. ?A large chunk of institutional money is in the form of demand deposits. We have robust capital positioning. We have not been borrowing in the call market,? said Ahuja.
Bank of America has gradually ramped up its manpower base over the years and added on another 10% this year.
On the Basel II implementation, which will kick off by March-end for banks having an international presence, Ahuja says the bank?s capital adequacy ratio would improve by at least 200 basis points (post implementation).
Bank of America Corporation owns a subsidiary in India called Banc of America Securities India Pvt Ltd, which is engaged in underwriting, dealing, and trading of corporate fixed income securities and related capital market activities.
During 2007, the subsidiary reported an over 3% increase in revenues comprising interest and other income of Rs 22.1 crore. This entity has also performed significantly better this year.