The Hindu Business Line : IDBI examining options to merge home finance arm with itself

"This will not happen till March 2006. They (housing finance) are doing well. Dispersals have been good. But we are trying to find out if there will be synergy in merging the two entities," he told reporters.

Mr Shetty was here to inaugurate the second branch of the merged entity (IDBI Bank with IDBI Ltd) in the city.

Stating that IDBI Ltd is in the process of stepping up its branch expansion drive, he said, the branch network would be strengthened from 129 to 200 by March 2006 and to 500 by March 2008.

The ATM network is also being simultaneously increased from 334 to 500 by the end of the current financial year.

It also plans to set up representative offices in the Gulf and in one or two South-East Asian Countries.

"The process has started. We will have an office or two within the next twelve months," said Mr Shetty. The merged entity is targeting a business volume of Rs 1,50,000 crore this year.

Mr Shetty is confident of achieving this target. "We are targeting a compounded annual growth rate of 25 per cent for the next three years,' he added.

Stating that there were enough green-field projects on hand, he said IDBI was also exploring newer projects areas such as airports, seaports and special export zones for deployment of funds.

To a query on non-performing assets, Mr Shetty said the Government had, prior to the merger, acquired Rs 9,000 crore of stressed assets and created the `Stressed Asset Stabilisation Fund'.

"Though we have a 20-year time span for recovering this amount, we will be able to recover it within five years from today. We are in the process of recovering Rs 2,500 crore out of this through the OTS (one time settlement) route. For resolving the issue, we will have to look at options for restructuring the loan or for a negotiated settlement. The process has started," he said.

Mr Shetty did not rule out the acquisition route for expansion, but said: "We will keep our eyes and ears open to any opportunity that come our way - grab it to gain strength and encash on our credibility."

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