The Hindu Business Line : Allahabad Bank to grow `robust' retail portfolios

ALLAHABAD Bank plans to build "robust" retail portfolios, "may be in housing loan segment" and subsequently sell them to boost bottomline, going forward, top banking sources said.

"Allahabad Bank might build up healthy retail portfolios and after some time look at selling them at a premium to entities seeking to grow through portfolio takeouts," bank sources said. "This will help us strengthen our profitability in the long run... our primary task now would be to build strong portfolios," sources added.

However, the bank ruled out options to buy out "healthy" portfolios on its own to boost its assets. "We would rather try to grow our asset size on our own," the sources said. "This will help us keep a check on the asset quality," they added. Hence, a prospective buyer of such a portfolio is likely "to pay a premium" as the asset quality had already been "screened" by the bank, sources said.

It can be recalled that the State-owned bank has indicated to acquire private sector banks or financial institutions to spur growth in the southern as well western markets.

Allahabad Bank expects to report net profit close to Rs 400 crore for financial year 2003-04. The bank expects to report total business of Rs 47,000 crore in the current year and Rs 60,000 crore in the financial year 2004-05.

The bank plans to shrink its net non-performing asset (NPA) ratio to three per cent by the end of the current fiscal and further squeeze it to one per cent by the end of the next fiscal.

It will open its representative offices in China, Singapore, Colombo and either in Indonesia or in Malaysia by the end of the next financial year.

However, the bank is exploring the possibilities to float either a joint venture or a subsidiary in Colombo and has held talks with Bank of India and Bank of Baroda towards such initiative.