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Federal Bank to beef up presence outside Kerala

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Mr M. Venugopalan
Mr M. Venugopalan

L.N. Revathy

Palakkad, May 16

THE Alluva-based Federal Bank Ltd is hoping to increase its presence in the other States excluding Kerala.

"We are a national bank with more focus on Kerala. Now, we are planning to slowly strengthen our presence in Tamil Nadu, Karnataka and Maharashtra. We may not be able to open branches everywhere. We are only looking for business-driven growth," its Chairman and CEO, Mr M. Venugopalan, told Business Line.

He made this observation within a fortnight of taking charge as Chairman of the bank. The present assignment, he perceives, would be more challenging than his earlier one as Chairman of Bank of India.

He was in Palakkad in connection with the shifting of a branch.

When asked if the bank was looking for an alliance to increase its presence in other States, Mr Venugopalan did not rule out the idea, but stated that alliances invariably did not work well.

Stating that smaller size was a better bet for takeover in a competitive environment, he emphasised the need for growing business volumes, retaining profitability and offering better customer service. "This way, you can keep the take-over proposition `a little way,' may be 2009 or some time later."

To a query on the growth strategy, Mr Venugopalan said Federal Bank would look at organic growth. The bank, he conceded, would look at taking over some smaller bank to grow in size, but had not identified one till now. "Not necessarily in Kerala, we are looking at options outside the State," he said, and added that Federal Bank would soon increase its capital as well for growth. "Our capital at the moment is enough and the Basel norms may not affect us much. However, we cannot wait long."

According to him, marketing the bank's product and strengthening its brand image would be an exercise that would be taken up aggressively. "In the present form, we can exist, but cannot grow," he added.

(This article was published in the Business Line print edition dated May 17, 2005)
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