The Hindu Business Line : Allahabad Bank mulls acquisitions in South

THE state-owned Allahabad Bank plans to buy similar public sector or privately owned banks or financial institutions to spur growth in the South, the Chairman and Managing Director, Mr O.N. Singh, has said.

The target companies are likely to have total business in the range of Rs 10,000 crore - Rs 15,000 crore with branch network of close to 300-400. The acquisition is likely to be completed by the end of fiscal 2004-05, Mr Singh said. An investment banker is likely to be mandated to scout for targets and carry the due-diligence in three months, he added.

Declining to give details on targets, Mr Singh said the bank's "strategies were to align with certain institutions to grow business." Allahabad Bank is also mulling similar inorganic route to grow its business in the western part of the country, Mr Singh added. The bank also hinted at infusing additional capital if the buy-out happens within its scheduled timeframe.

Meanwhile, the bank reiterated that it would report a net profit of close to Rs 400 crore for the current fiscal with an operating profit of Rs 750 crore. "We are confident of crossing that figure," Mr Singh said. The bank expects a total business of Rs 47,000 crore in the current year and Rs 60,000 crore in the financial year 2004-05. It plans to shrink its net non-performing asset (NPA) ratio to three per cent by the end of the current fiscal and reduce it further to one per cent by the end of the next fiscal.

Allahabad Bank will open its representative offices in China, Singapore, Colombo and either in Indonesia or Malaysia by the end of the next financial year, Mr Singh said. The bank is exploring possibilities to float either a joint venture or a subsidiary in Colombo and has held talks with Bank of India and Bank of Baroda towards such an initiative. The bank will sign a pact with Unit Trust of India shortly, which will help the bank sell UTI's mutual fund products and boost fee-based income.

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