The Hindu Business Line : `Outside threats not to impact Karnataka Bank'

A large number of individual shareholders and the absence of any significant promoter holding would help Karnataka Bank retain its identity amidst `outside threats', Mr Ananthakrishna, Chairman and Chief Executive Officer, Karnataka Bank, said here on Monday.

Mr Ananthakrishna, did not, however, elaborate on what the `outside threats' were. Stating that it was truly a professional bank, he said the management has the confidence of continuing it in the same way. "Whether 2009 or 2010, Karnataka Bank will remain as Karnataka Bank with its professional management, and it will be in your service. I have that confidence," he added.

Mr Ananthakrishna's statement assumes significance at a time when doubts are being expressed in the banking industry about the future of old private banks, in the light of the merger of two such banks — Sangli Bank and United Western Bank — in the recent past.

He was speaking at the inauguration of the renovated branch of Karnataka Bank at Kodialbail in Mangalore on Monday.

Uptrend in share price

The share price of the bank has seen a rapid increase recently. Quoting at around Rs 80 in June 2006, the stock is now at about Rs 151.

The upward movement has been particularly pronounced during the past fortnight, when the stock has gained more than Rs 40. The bank has more than 90,000 shareholders, including individual shareholders.

Mr Ananthakrishna said that the bank is above the stipulated limit in the major three parameters — capital adequacy ratio (CAR), Return on Assets (RoA), and non-performing assets (NPA) — of its strength.

The CAR, which stood at 11 per cent for the last six years, is 12 per cent now, and the RoA is above 1.25 per cent for the last four years, he said. The bank's NPA level is 1.45 per cent. "We want to bring it below 1 per cent by the end of the year," he added.

Target

The Chief General Manager of the bank, Mr P. Jayarama Bhat, said that the bank has set a target of Rs 25,000 crore business for 2006-07 and a profit of Rs 215 crore. The bank, which has 401 branches, wants to open 415 by the end of the fiscal. The bank will network all its branches by the end of 2006-07, he added.

Rev. Fred V. Periera, Vicar General, Bishop's House, Mangalore, inaugurated the bank's renovated branch on the occasion.