Financial Daily from THE HINDU group of publications
Wednesday, Feb 25, 2004
Financial Daily from THE HINDU group of publications Wednesday, Feb 25, 2004 |
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Money & Banking
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Private Banks No takeover threat, says Federal Bank chief L.N. Revathy
Mr K.P. Padmakumar
Tirupur , Feb. 24 THOUGH the Federal Bank Chairman, Mr K.P. Padmakumar, maintained that the bank was looking at an organic growth and there was no threat of a takeover by any other bank, he did indicate that there were a lot of synergies between his bank and India's second largest bank - ICICI Bank. Mr Padmakumar stopped over at Tirupur after inaugurating the bank's 193rd ATM. He earlier kicked off an ATM at Erode. When quizzed about rumours of the bank being taken over, Mr Padmakumar said: "According to reports, ICICI Bank, which has a 21 per cent stake in Federal Bank was planning to divest its holding. But the issue has since been sorted out. ICICI Bank has indicated that it will neither offload nor increase its stake further." He conceded that both ICICI Bank and Federal Bank had certain synergies such as the co-branded credit card with the former, in risk management practices and sharing of ATM network. "A lot of placement power also vests with ICICI Bank. This gives them a chance to syndicate the loans. Further, we have invested in their Asset Reconstruction Company (ARC). This association would help us in selling off our non-performing assets (NPAs)," he said. The bank is confident of bringing down its NPAs from the level of 4.9 per cent (at the end of the third quarter of the current fiscal) to 3 per cent before the close of this fiscal. On performance, he said that the bank was targeting at total business volume of Rs 20,000 crore during the current financial year. "Our net profit would cross Rs 150 crore this year. We are looking at 20 to 25 per cent asset growth next year," he added. To a query on the rising NPA on the home loan front, he conceded that it was very high, because the bank had extended to the planters. When asked if he envisaged a marginal increase in the interest rate with improvements in credit offtake, he said the prospects were bleak in the medium term. He said that every branch of Federal Bank in Tamil Nadu would have an ATM by March-end. On IPO, the Federal Bank Chairman said: "Not now, may be next year to strengthen our capital adequacy ratio when business volumes grow."
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