The Hindu Business Line : IOB not to enter stock broking

Chennai, July 27 With the change at the helm, there has been a shift in gears. The new Chairman and Managing Director of Indian Overseas Bank, Mr S.A. Bhat, intends to go slow on activating the bank’s financial services subsidiary, which recently obtained the RBI’s nod for stock broking activities.

At a press conference here, he said that the bank would not begin stock broking activities. Other financial services such as wealth management and merchant banking could well be provided by the parent bank.

However, Mr Bhat has a few cards up his sleeve for enhancing IOB’s fee-based income – he has started a ‘syndication desk’ in the bank and intends to offer derivative products to customers.

Today, sometimes customers of the bank need to go to other large private sector banks when they need to raise large chunks of money. Now, instead of letting them do so, the syndication desk will arrange for the entire loan and earn a fee income in the process.

Similarly, IOB would offer derivative products, fully protected by back-to-back arrangements with counter parties, so that it does not take any risk.

Net up at Rs 268 cr

IOB today announced a net profit of Rs 268 crore for the April-June quarter of the current year, 20 per cent higher than Rs 222 crore achieved in the same period last year.

Mr Bhat expects the current quarter to be better, mainly because of higher ‘other income’, thanks to trading profits.

More Stories on : Financial Performance | Public Sector Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page