The Hindu Business Line : Bharat Overseas eyes Rs 5,000-cr business

HAVING strengthened its capital to risk assets ratio (CRAR) to over 16 per cent recently through a tier-II capital issue, Bharat Overseas Bank Ltd (BOBL), the Chennai-based private sector bank, has now chalked out a strategy to improve its business volumes to Rs 5,000 crore by the current fiscal end from last fiscal's Rs 3,900 crore, a growth of over 28 per cent.

Announcing this at a media conference here on Thursday, the BOBL Chairman and Chief Executive Officer, Mr G. Krishna Murthy, said with a significant technology initiatives at an advanced stage of implementation, the bank is confident of achieving the targeted business volumes.

Rs 30 crore has been earmarked towards various technology initiatives, of which over Rs 12 crore was already spent; the balance would be deployed during the next 12 to 18 months, he said.

The technology initiatives include implementation of core banking solution, any branch banking, setting up of automated teller machines and putting in place the integrated treasury management solution.

Currently, the bank has 85 branches and nine ATMs.

It proposes to expand its network to over 100 branches and 25 ATMs by the middle of next fiscal.

According to Mr Krishna Murthy, the bank is currently at an advanced stage of negotiations with a couple of agencies and other banks for agreements on sharing ATM network.

These alliances would enable the BOBL customers have access to over 1,000 ATMs across the country, he claimed.

The bank has also chalked out a new business strategy, wherein it proposes to reduce the business volumes from the corporate segment to 40 per cent from the existing level of 60 per cent and to improve the retail-lending portfolio to 60 per cent from the current level of 40 per cent.

"The retail lending activities would cater to the small and medium enterprises also," Mr Krishna Murthy said.

The change in business mix would result in not only reducing the level of non-performing assets (NPAs) but also enable the bank to have a niche for itself, he said.

The bank plans proposes to reduce the level of its net NPAs to below 2 per cent from the current level of 2.26 per cent and to improve the net-owned funds to over Rs 200 crore from Rs 172 crore as at the end of last fiscal.

The bank has taken up vending of insurance products of ING Vysya and National Insurance Company, distribution of Bank of Baroda's credit cards and also taken up money transfer facility in alliance with Western Union Money Transfer, Mr Krishna Murthy added.