Business Daily from THE HINDU group of publications
Friday, Oct 06, 2006
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Business Daily from THE HINDU group of publications Friday, Oct 06, 2006 ePaper |
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Money & Banking
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Private Banks IDBI meets branch expansion target with UWB merger Our Bureau
OPERATIONS NORMAL: Mr V. P. Shetty (left), CMD, IDBI, and Mr J. Balakrishnan, Deputy MD, at a press conference in Mumbai on Thursday. - Paul Noronha
Mumbai , Oct. 5
The merger of United Western Bank will have no major impact on IDBI Bank's profitability though its capital adequacy could take a marginal hit, said Mr V.P. Shetty, Chairman and Managing Director, IDBI Ltd. IDBI Bank has a capital adequacy ratio of 14.99 per cent. Mr Shetty said that with the acquisition IDBI had almost met the target set for branch expansion by 2008. IDBI Bank has doubled its branch network from 200 to 430 branches while it targeted 500 branches by 2008. Mr Shetty said there was a branch overlap in around 15 centres. Hence, one branch in each of these centres would be shifted. United Western Bank currently has around seven to eight loss-making branches, of which around six are in rural areas, he said. "With this merger, IDBI Bank's priority sector commitment will be easily met," Mr Shetty said. In the second quarter, IDBI Bank has posted a growth of 69 per cent in deposits to Rs 31,000 crore. The rise in advances was around 17.2 per cent at Rs 54,500 crore
`Business as usual'
On October 3, the first day after the amalgamation of United Western Bank and IDBI Ltd, the withdrawal was around Rs 50 crore. "This is less than normal and reflects the fact that customers are satisfied and comfortable and don't feel the need to withdraw their accounts," said Mr Shetty. He said that all clearing operations were normal and the combined network of 500 ATMs were accessible to the customers of both banks. Mr Shetty said the pay structure of the UWB staff would be protected for three years. The average age of a UWB employee is 49-50 years and around 1,000 employees would retire in the next one-and-a-half years. "We will make the necessary arrangements for filling the gaps, upgrading skills and acquiring personnel," Mr Shetty said.
Related Stories: More Stories on : Private Banks | Mergers & Acquisitions
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