The Hindu Business Line : Canara Bank open to M&As

CANARA Bank is open to mergers and acquisitions as a part of its growth strategy and would actively look out for opportunities whenever they arise, its Chairman and Managing Director, Mr M.B.N. Rao, has said.

Addressing newspersons on the eve of inaugurating a branch and an ATM at Kompally on the city outskirts here on Tuesday, he said, "Being one of the largest banks in the country, we believe in consolidation in the sector, which in turn will help us grow".

The bank has set a target of achieving Rs 1,82,000-crore business during the current fiscal from Rs 1,67,000 crore as at the end of September 2005. Of the targeted business volume, the bank expects to attain Rs 1,10,000 crore of deposits and around Rs 72,000 crore of advances, Mr Rao said.

The bank had posted a growth rate of 12.63 per cent in deposits and 24.74 per cent in advances during the last fiscal. "We are confident of maintaining the growth rate during the current fiscal as well," Mr Rao said.

Having raised Rs 500 crore through the issue of subordinated bonds under tier-II capital recently, the bank is quite comfortable with its capital adequacy ratio at 12.35 per cent, which would enable it to meet the Basel-II norms as well.

Aimed at significantly improving the non-interest income levels, the bank is planning to go aggressive in marketing insurance products and selling mutual funds. The bank has also tied up with a few other banks for a venture capital initiative. These include Oriental Bank of Commerce, Corporation Bank, Allahabad Bank, Indian Overseas Bank and SIDBI. Under this venture capital initiative, Rs 55 crore had been raised and plans were to take the corpus to at least Rs 100 crore by the fiscal-end, Mr Rao said.

The bank proposes to deploy these funds in infrastructure projects, information technology and biotechnology fields and high potential SMEs. Stating that the bank was currently scouting for good projects for investments, Mr Rao said the target was to strengthen the venture capital fund several-fold in the coming years with the combined financial strength of other participating banks.

Aiming to become the `financial supermarket' at the earliest, the bank is also planning to activate all its subsidiaries towards enhancing the products and services portfolio, Mr M.B.N. Rao said.

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Canara Bank open to M&As

P.S. Prasad is CEO, Dhanalakshmi Bank