The Hindu Business Line : Corpn Bank eyes inorganic route

In its bid to grow into a Rs 1-lakh crore entity in the next three years, Corporation Bank plans to pursue the inorganic route. It prefers to scout for smaller sized banks of up to Rs 20,000 crore, mostly in the northern region for getting geographic advantage.

The bank's new Chairman and Managing Director, Mr B. Sambamurthy, told Business Line, "Though Corporation Bank has achieved strong fundamentals and business growth, we cannot be content with the achievements. Size does matter now. Accordingly, we are chalking out a strategy of aggressively enlarging the bank's business, both by way of organic growth and inorganic route. However, we have no bank in mind for acquisitions at present."

The bank has a business size of Rs 56,000 crore and aims to double it to around Rs 1-lakh crore by March 2009, Mr Sambamurthy said. Further, the bank plans to set up 200 ATMs and 75 branches during this fiscal. The bank has a network of 835 branches, 53 extension centres and 901 ATMs.

Aimed at encashing the opportunities emerging from the stock market boom, Corporation Bank plans to offer complete stock trading services to its customers by placing demat, savings and brokerage services under single roof. As a part of this, the bank proposes to introduce online trading facility to its customers in alliance with IL&FS. Though the bank is currently offering demat services, "it doesn't work on stand-alone basis," Mr Sambamurthy said.

Housing arm merger

The bank proposes to merge its wholly owned housing finance subsidiary with itself. It would be shortly initiating measures in this direction, he said.

The bank is also weighing the options on its primary dealer (PD) outfit. A decision, whether to continue the PD arm independently or merge it with the bank, would be arrived at soon, Mr Sambamurthy said.

Highly comfortable with a CAR of 14.91 per cent as of December 2005, the bank has no plans to tap the capital market. The bank proposes to consider raising funds either through Tier-II bonds or hybrid capital, he said.