The Hindu Business Line : Allahabad Bank has no M&A plans as of now

Kolkata, June 17 Allahabad Bank has no immediate plans either to go for acquisitions and mergers or to open foreign branches. Giving this information here, Mr A.C. Mahajan, Chief Managing Director of the bank, observed, “We are happy with our present growth and we’ll continue to grow without acquisitions or additional foreign branches.” Mr Mahajan was replying to queries of the shareholders at the company’s annual general meeting.

The bank, as the CMD pointed out, was currently having one foreign branch in Hong Kong and a representative office in Shenzhen in China. “The representative office in China is due for upgradation and we’ll initiate necessary steps,” he said. The surveys undertaken for opening branches in Bangladesh and Kenya had been put on hold now, he said.

The mergers and acquisitions, he felt, were not being considered as the bank was growing and opening new branches. Last year, 94 branches were opened and this year there were proposals for another 115 or so, he said.

Market price

A section of the shareholders wanted to know why the market price of the bank’s share was lower than the book value of the share. “It is in line with the trend in the market,” the CMD replied, pointing out that all bank shares behaved more or less the same way. However, the bank’s fundamentals as reflected in capital adequacy ratio and return on assets were strong, he said, but refrained from making any comment on the proposed rights issue.

The decision to declare higher dividend at 35 per cent as against 30 per cent declared earlier for 2007-08 increased the total dividend payout to Rs 156.35 crore from Rs 134.01 crore. Consequently reserves and surpluses dropped while liabilities and provisions increased.

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