The Hindu Business Line : Allahabad Bank may raise Rs 500-cr Tier-II capital

The bank, which has enough headroom for bringing in fresh capital, is yet to take a final view on the matter. It will formally consider the proposal shortly.

Mr A.C. Mahajan, Chairman and Managing Director, indicated that the bank is not considering a Tier-I issue as it has sufficient capital at the moment.

He was talking to newspersons on Thursday after signing a distribution agreement with Franklin Templeton.

The Kolkata-based bank, which is expected to announce its quarterly results this week, is looking at credit growth of about 20 per cent and deposit growth of 18 per cent. Credit offtake is expected to take place on several fronts in the coming days.

Manufacturing industries, for instance, may require substantial credit to finance growth plans.

Deposit rates offered by the banking industry are set to go down a bit, Mr Mahajan said while replying to a question on trends affecting the country’s lending institutions. “Deposit rates have already started showing some signs of softening.”

The bank’s board recently approved the launch of a reverse mortgage product.

Allahabad Bank has set a target of Rs 1 lakh crore business by the end of March 2010.

The distribution arrangement with Franklin Templeton will complement the bank’s effort to shore up fee-based income.

It will also enable the bank to provide more alternative savings and investments products.

Non-life insurance venture getting ready

Allahabad Bank’s non-life insurance joint venture, in which Japanese company Sompo is one of the partners, is set to start operations soon, after final clearance is received from the insurance regulator.

The company, in which the bank holds a critical stake, may be expected to write its first policy soon, Mr Mahajan said while referring to the bank’s overall plans to step into the general insurance business. Indian Overseas Bank, Karnataka Bank and Dabur are the other partners in the joint venture, called Universal Sompo.

The Japanese firm has 26 per cent stake in it.

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