American Express Profit Rises 71%

American Express Co.'s third-quarter profits soared 71% as customers increased their spending by 14%, and receding losses from souring card loans allowed the company to squirrel away less for a rainy day.

AMEX’s results offer an insight into the rising optimism of its borrowers—mostly well-heeled consumers and companies—as the economy stabilize despite stubbornly high unemployment. The company's performance also cements the turnaround in the credit-card industry.

Like many banks that reported earnings recently, American Express is benefiting from fewer losses on bad loans, but struggling with weak demand for new loans that would lift revenue.

Lending volumes "remain below prerecessionary levels as card members continued to manage their finances carefully and pay down outstanding debt," Kenneth I. Chenault, AMEX’s chief executive, said in a statement.

AmEx shares, which were up 54 cents, or 1.4%, to $40.27 in trading on the New York Stock Exchange, fell 0.9% to $39.90 in after-hours trading.

American Express issues charge cards, which must be paid off each month, as well as credit cards that allow customers to carry a balance. Unlike most other card companies, which either lend or process the transactions, AmEx does both. Therefore, a big chunk of its revenue comes from fees it charges banks and merchants, such as grocery stores or gasoline stations, to process card payments.

AmEx reported third quarter net income of $1.09 billion, or 90 cents a share, up from $640 million, or 53 cents a share, a year earlier. Analysts polled by Thomson Reuters forecast earnings of 86 cents on $6.8 billion in revenue.

The company's U.S. card business reported net income of $595 million in the third quarter, up from $158 million a year earlier.

Lower delinquencies, a gauge of future losses, allowed New York-based AmEx to squirrel away $373 million for potential losses, down 68% from last year's third quarter. American Express reduced its reserve for losses by $959 million in the latest quarter, boosting income. For the time being, lower card balances will likely be offset by reduced loan-loss reserves.

For the quarter ended Sep. 30, the company wrote off 5.2% of its U.S. card loans, down from 6.2% in the second quarter and 8.9% in last year's third quarter. Meanwhile, 2.5% of the company's U.S. cardholders were a month behind on their payments, an improvement from 2.7% as of Jun. 30 and 4.1% a year ago.

During the recession, consumer spending slowed, eating into AmEx's transaction fees. The more cardholders charge on their AmEx plastic, the more the company earns by way of fees.

AmEx's revenue rose 17% to $7 billion, aided by the implementation of a new accounting rule requiring companies to bring their off-the-books securitized loans on to their balance sheets in fiscal 2010, and higher cardholder spending. This was offset by lower U.S. card balances, which fell 7% from a year ago to $49.1 billion.

SBI up lending rate by 10 bps to 7.6%

State Bank of India (SBI) increased base rate or the minimum lending rate for the new borrower by 10 basis points to 7.6 %, a move that would make all kinds of advances, including corporate loans, costlier.
The bank has revised the base rate below which bank cannot offer loans, upwards by 10 basis points from 7.5 % to 7.6 %, effective from October 21, 2010, SBI informed the Bombay Stock Exchange.
This is the first review of the base rate since it was introduced in July this year. As per the RBI guideline, banks have to review their base rate every quarter.
With the increase in base rate, all kinds of loans excluding housing and auto loans would be dearer by at least 10 basis points (0.1 %).
Currently, SBI is offering teaser home and car loan till December and rates would be as announced earlier.
The revision in base rate follows the RBI's move to raise short-term lending (repo) and borrowing (reverse repo) rates in its September monetary review.
In order to bring in more transparency, the base rate was introduced as replacement for the Benchmark Prime Lending Rate (BPLR) from July 1 this year.
SBI has also raised BPLR for the existing customers by 25 basis points to 12.5 % from earlier 12.25 %. The new rate would be effective from tomorrow.
Earlier this month, SBI hiked fixed deposit rates by up to 75 basis points. The bank raised deposit rates from 25-75 basis points (0.25-0.75 %) across various maturities.
For 91-180 days term deposits, SBI provides 5.5 % interest, up 75 basis points from the existing rate.
A fixed deposit with maturity period between 1 year and 554 days was raised by 25 basis points to 7 %, while deposits for 555 days would attract 7.5 %.
The interest rate on term deposits of between 556 days and 1,000 days under different slabs, has been increased by 50 basis points, to 7.75 %.

Credit Card which satisfy your all requires

A credit card helps the user to purchase the goods and services without the risk of carry the money with them. When the purchase is made, the Credit card holder gives the card to the seller. The seller swipes the card and feeds the secret PIN number as told by the card holder. After the end of each month the card holder is provided with a statement sent from the Authority providing the details of the transactions made by the user during the month. It also provides the information about the exact date of payment of the dues. The company usually provides the customer a grace period of 20 to 40 days depending upon the amount of credit card issued by the organization. There are various type of organization that provide the credit cards like SBI, ICICI,  HDFC, ABN-AMRO etc. The company that issues the card usually charges a certain amount of interest on the amount of total purchase made by the user.
The Credit card provides various kind of benefit to the user. It allows the user to get the short term loans within a small period of time depending on the fact that the total charges are not higher than the maximum credit limit of the card. Moreover it reduces the risk of carrying the liquid cash in order to purchase the goods.
HDFC Credit cards also provide several kinds of benefits to the users. In order to satisfy the different needs of the different customer they have designed their credit cards into various categories. They have cards like Classic Cards, Special benefit Cards, Premium Cards and Commercial Cards. In the head of Classic Cards there are different cards like Silver Credit, Value Plus, Gold Credit Card, Titanium, Women Gold, Platinum Plus, Visa Signature, and World Master Credit Card. The Commercial Cards are also subdivided into several parts like Corporate Credit Cards, Corporate Platinum Credit Card, and Business Credit Card etc.
Like other credit cards ABN-AMRO credit cards provide the user the power to manage the all the finances of them. The ABN-AMRO Freedom credit cards provide different kinds of benefits like it reduces the prices of petrol at the time of making the payment. Through the use of this card the user can earn bonus points. As per the rules the customer earns one bonus points for making a purchase of more than Rs.100. This bonus points can be exchanged later on with an exciting gift hamper. It has also got different variety of cards to satisfy the demand of the different strata of the customer. The different cards are Platinum Card, Make My Trip Card,Smart Gold Card etc.
So the Credit cards provide different benefits to the different people and in this busy life every body should have the access of the cards in order to make their life more speedy.
Also Apply SBI Credit cards Online

Credit card companies offers good plans in festive season

What most spenders like about the festive season is the huge discounts, attractive schemes and offers most consumers durable companies come out on their products and services. With the economy picking up and the credit card usage increasing once again, card issuing companies too have tied up with various brands to offer tempting discounts, cash back offers, finance schemes.
And these offers are not just applicable on credit cards alone but are extended to some debit cards as well. “Apart from offering bonus points over and above the regular reward points earned on spending on the ICICI Bank credit cards and debit cards this season, we have come out with exclusive discounts on lifestyle and electronics too, “ says an ICICI spokesperson.
During the coming week, when you go shopping make sure you corner those extra savings and rewards that your credit card can offer you.
Apparel: You can avail discounts of up to 10% if you swipe your HSBC credit cards and Axis bank to purchase clothes. HSBC, for instance, has come out with festive scheme — Happy Swipes, where its credit and debit cardholders are eligible for cash back of 5% on making any purchase from Fabindia and Jashn stores on a minimum transaction of Rs 2,500 and Rs 5,000, respectively.
In case you wish to pick something from Star Bazaar this season, you can avail 5% cash back on a minimum spend of Rs 1,500. Under the cash back offer, the money gets credited to your account after the purchase has taken place. Similarly, by making a minimum purchase of Rs 3,000 on your Axis bank credit or debit card, you can avail additional 10% discount on purchase of any apparel at Central and Pantaloon outlets.
Dining: There is something for your palate too. As an American Express cardholder, if you book a flight to Hong Kong through Cathay Pacific Airline this month, and can participate in the “Hong Kong Wine and Dine Festival”, which is being organised from October 28 to October 31, you would get a free wine pass. However, if you travel first or business class (card), you would receive 5 wine tokens in addition to it.
Travel: If you are in a holiday mood this season, make sure you book tickets online. Several credit card issuers like HSBC and SBI have tied up with online travel portals like makemytrip.com, ezeego1.com for cash back offers of up to 30% on booking through them.
Under IRCTC and SBI card tie-up, you are eligible for refund up to 17% on all hotel and railway bookings, if the transaction is worth Rs 7,500 and above. Also, you can earn discounted tickets this season by using your card. Under the ‘Bonus Pe Flying Bonus’ offer by SBI cards, you can earn one discounted Kingfisher airline ticket if you swipe your card for purchase worth between Rs 60,000-one lakh.
Any purchase above Rs 1 lakh can get you two such tickets. “These offers are for both new as well as existing cardholders, provided the new cardholders have enrolled within the offer period,” says Abhay Kumar Singh, CEO, SBI Card. Similarly, you can save up to 10% on the base fare of your GoAir ticket by using your HSBC credit or debit card.
For your city travel you can make use of your Indian Oil Citibank credit card wherein you will get free fuel worth Rs 300 (maximum Rs 600) on every spend of Rs 30,000 on the card. The free fuel would be credited as Turbo Points to your card and will reflect in your credit card statement. The scheme, which has been running under its special offer is valid till the end of November.

LIC HFL Financial and United India Insurance ties-up

United India Insurance Company Ltd and LIC HFL Financial Services Ltd, a fully owned company of LIC Housing Finance Ltd, on Monday announced a strategic tie-up to distribute non-life insurance products at an event in Mumbai on Monday.
As per the terms of agreement, LIC HFL Financial Services will undertake non fund-based activities like marketing of housing loans, insurance products, credit cards, mutual funds and other third-party products. The company has established marketing units at 33 different centres across the country.
RR Nair, director and chief executive officer (CEO) of LIC Housing Finance, said, “Our main focus is on retail and we aim to provide innovative products at economic prices.”
Shobana Murli, CEO of LIC HFL, announced their stated goal was to reach 20,000 homes this financial year.
The government-owned United India is one of the fastest growing non-life insurance majors in the country, second in terms of business net worth (which is currently pegged over Rs 4,000 crore) and solvency margins (3.41 per cent). The company posted a net profit of Rs 707.79 crore in 2009-10.
As per the current norms of the insurance regulator, a company is permitted only two tie-ups – one with a general product firm and another with a life insurance company.
LIC HFL Financial Services can already boast of being the frontrunner in terms of disbursements and sanctions for home loans for 2009-10. Currently, the firm receives 10-12 per cent of its business through corporate agents. A LICHFL Financial Services official said that the company expects to achieve business worth Rs 1,000 crore within a year of its launch.
”For the financial year 2009-2010, the firm saw a net worth of Rs 3,000 crore, with a target to touch Rs 6,000 crore by FY 2010-2011. Of this, Rs 1,000 crore would be attributed to new business generated by this association.” said Nair. “The non-life insurance market is growing in tandem with the economy. Great growth prospects are also seen in the retail segment,” he added.

Credit cards make life easier, do understand the fine print

It is not rare to see credit cards, which are seen as tools of convenience, turning into weapons of financial destruction for card holders, often due to lack of knowledge about their correct usage. Despite being constantly reminded about this, many fail to keep themselves abreast of the charges and other terms and conditions pertaining to a credit card. The realisation usually sets in only when their monthly credit card statement arrives at their doorsteps, showing an amount in excess of their estimation.
The first step to avoid mistakes other card users generally make is to take a close look at the Most Important Terms and Conditions (MITC) list, which is put up on the card issuers’ website. In addition to finance charges (interest charged on overdue amount payable to the company) and late payment fees, which are commonly known, it contains the details of charges payable by the user on other counts.
For instance, it may be tempting to use your credit card to withdraw cash, if your bank balance is inadequate. However, you need to remember that cash withdrawal at ATMs using a credit card attracts an upfront charge of nearly 2.5% of the amount. What’s more, in case of such transactions, the payment becomes due from the date of withdrawal and not after the expiry of the grace period, which is the case with transactions where the cards are swiped at Point of Sale (POS) terminals. The rate of interest could range from 39-45% per annum.
Besides, if you do not monitor your card usage, there is a chance that you could exceed your credit limit, attracting an overdrawing charge of around 2.5%, or `500, whichever is higher. Also, depending on the bank’s cheque collection policy, you may have to shell out charges for making credit card bill payment through an outstation cheque. This could be around 1% of the cheque value, or `50, for every instrument.
Finally, another term that you need to be aware of relates to non-payment of dues. If you maintain another account with the bank which has issued the credit card to you and have not been paying the card bill as per schedule, the bank has the right to use the money lying in your account to clear your credit card outstanding, without seeking your consent.

Govt plans low rates home loans for paramilitary personnel

In an attempt to make home ownership easier for paramilitary personnel, the Central government is planning to launch a scheme under which home loans are made available to them at concessional rates. “The scheme will allow a soldier from a paramilitary force to avail cheaper home loans at least two years prior to his retirement,” a senior home ministry officer told Hindustan Times.
The official added that the government is formulating the exact modalities of this scheme, such as loans rates and tenures and has initiated talks with several banks for its implementation.
“The State Bank of India has in-principle agreed to be part of this scheme,” the official said.
In fact, SBI has already been closely associated with the armed forces. The bank had recently launched Defence Salary Package (DSP) for the Indian Army whereby it aims to open close to 12 lakh accounts of Army personnel under the scheme.
The DSP offers free drafts, cheque books, fund transfers and ATM cards to the soldiers of Indian Army to any of SBI Group’s over 15,000 branches.
The scheme also offers home, auto and personal loans to Army personnel at 25 basis points lower than the floor rate.

Indian Travel Website say Special Offer for HDFC Bank Credit Card Customers

Indian travel website in association with HDFC bank brings a special offer for travelers in India. The website have offered up to 10% discount on all travel booking including the discount coupons / promo code which are valid for Domestic & International Air Tickets and Domestic Hotel / holiday bookings.
According to the website, the promotion will last till 31st Dec, 2010. The discount may be extended for satisfaction of the customers holding HDFC Credit card. Customers have to submit the discount coupon / promo code “Code” followed by 6 digit of the Credit Card for eg. "Code123456". Discount will not be valid on cancelled tickets/bookings or for charge back transactions. The discount will not be valid if any one of the air ticket is canceled.
Now travelers can enjoy Domestic Holidays with in India with the extension discount of 20% on Holiday booking. The discount will not be valid if a Hotel is booked on Discount offer. At the same time, the promotion code can not be exchanged.
The website is planning to display more offers during festival season for the comfort of travelers. Travel websites are expecting new seasonal offers from banks so as to attract customers to their website. Even though the vacation season has ended most of the travel websites generates good sales due to various events which are to be held at India. So enjoy a good trip with the offers provided by online travel agents.

Citibank launches credit card for normal flyers

Citibank launched a new credit card that will give frequent flyers the chance to earn mileage points when they fly on more than 50 domestic and international airlines.
Till now, air travellers could only accumulate mileage points by flying on a single airline.
"The Citibank PremierMiles Credit Card differentiates itself by offering frequent flyers a 'universal' mileage platform that enables them the unique freedom and flexibility to earn miles on their travel on over 50 domestic and international airlines," Citibank said in a statement.
The key benefit of the Citibank credit card is that it frees customers from having to choose one airline loyalty programme over another. "The feature-rich card offers a superior earn rate of 10 PremierMiles per Rs 100 on all airline spends and a preferential interest rate," it added.
With an annual fee of Rs 5,000, card members will receive a first-year activation bonus of 5,000 PremierMiles.
"An annual spending of Rs 4 lakh in a year earns cardholders a bonus 2,500 PremierMiles. All non-airline purchases on the card earn customers 2.5 PremierMiles for every Rs 100 spent," Citi said.
Announcing the launch, N Rajashekaran, Citi India Country Business Manager, Global Consumer Group, said, "Citibank PremierMiles is a powerful addition to our bouquet of cards and will build on the success and popularity of this platform across multiple markets in Asia."