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(From right) Mr Indrajit Gupta, MD, SBI Caps; Mr O. N. Singh, CMD, Allahabad Bank; and Mr S. K. Goel, ED; at a press conference in Mumbai on Wednesday. - - Paul Noronha

Mumbai , March 23

ALLAHABAD Bank has announced that it is setting up a 40:60 joint venture with Punjab National Bank for starting banking operations in Kazakhstan.

Mr O.N. Singh, Chairman and Managing Director, Allahabad Bank, said here on Wednesday that the bank had obtained licence from the Kazakhstan Government and the joint venture would likely start operations within two months.

"Kazakhstan, being a growing economy, offers plenty of scope for banks. There is plenty of potential for trade between India and Kazakhstan,'' said Mr S.K. Goel, Executive Director, Allahabad Bank.

Kolkata-based Allahabad Bank is entering the capital market with its second public offer of 10 crore shares. The issue is slated to open on April 6 and close on April 12. The price band will be decided a day prior to the issue opening. The bank had issued its initial public offer in 2002, when it raised Rs 100 crore.

Of the 10 crore shares, 1 crore shares are reserved for employees and 1 crore for the existing shareholders. Around 8 crore shares will be for public issue, Mr Singh said.

The Government's stake in the bank will come down to 55 per cent, post-the public issue. The capital adequacy ratio, currently at 13.2 per cent, is expected to rise to around 15.5 per cent, said Mr Goel.

As part of expanding its overseas operations, the bank is also planning to set up a branch in Hong Kong and a representative office in China, Mr Singh said.

The money raised through the public issue will be used for growth plans and to meet the future capital requirements arising out of implementation of Basel II norms. Mr Singh said that the bank would focus on all areas for growth, including corporate lending, retail lending and agriculture.

The first public offer was a 100 per cent retail issue, but only 45 per cent of the shares are available in the market, Mr Singh said. This is because 55 per cent of the shareholders have not dematerialised their shares.

He said, "Both the nature of the issue and composition of shareholders will change in the second public offer. This time the entire issue is in demat form and the share of qualified institutional buyers and foreign institutional investors will be more."

For the nine months ended December 2004, the bank reported net profit of Rs 462.48 crore. As per the budget projection, for FY 2005 the operating profit is likely to be around Rs 1,100 crore and net profit is likely to be around Rs 600 crore, Mr Singh said.

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