Bharat Overseas Bank to focus on retail lending

Chennai-based Bharat Overseas Bank Limited (BOBL) has announced a major focus on retail lending during the financial year 2004-05.

Declaring the current fiscal as 'Year of Retail Banking' for the bank, it said it would reverse the lending proportion for corporate and retail sectors which had hitherto been in the ratio of 60:40.

Addressing a press conference here, G Krishna Murthy, chairman and chief executive officer of Bharat Overseas Bank, said: "This year, the two lending areas "�"� retail and corporate "�"� would be further divided into three areas, namely, retail, small and medium enterprises (SMEs) and corporate. A major focus would be on SME and retail banking. The bank is also in the process of introducing innovative retail banking products to meet the new demands of customers."

Earlier in the day, BOBL opened its second branch in the city at Kukatpally. Apart from the existing branch in the city, the bank has four more branches in the state at Vishakapatnam, Vijayawada, Guntur and Nellore. "We are also planning to open branches in Kakinada and Rajahmundry," Murthy said.

With the inauguration of the second branch in the city, the bank now has 85 branches in country. It plans 15 new branches during the current financial year. "The aim is to have a total of 100 branches by June 2005," Murthy said.

The bank's gross business for the year ended March 31, 2004, was Rs 4,000 crore, and according to Murthy, it would cross Rs 5,000 crore during the current financial year.

The bank issued seven per cent Tier-II bonds with a tenure of 87 months aggregating Rs 20 crore with a green show option of Rs 20 crore in the last financial year.

"The bonds were fully subscribed which helped the capital adequacy ratio (CAR) rise to 16.25 per cent as on March 31, 2004, from 13.87 per cent in the previous financial year," Murthy said.

The net profit of the bank registered a 23 per cent growth to Rs 35.08 crore as against Rs 28.52 crore it achieved during 2002-03. The net non-performing assets of the bank for the year was at 2.26 per cent.

BOBL has successfully implemented Flexcube core banking solution at 43 branches spread over six metros and four other centres covering a total business volume of 74 per cent.

"The total outlay for the computerisation and the installation of new automatic teller machines (ATMS) is around Rs 30 crore out of which Rs 12 crore has been spent and the remaining Rs 18 crore would be spent in the next two years," Murthy said.

The bank is also in the process of providing demat services at key branches and plans to provide ATM sharing facility to its customers through strategic tie-ups.