IOB to raise Rs 200 cr Tier-II cap

The south-based Indian Overseas Bank (IOB) has firmed up plans of raising Rs 200 crore of tier-II capital by September 2004 and has drawn up a plan to enhance its presence in China, Malaysia and Canada.

"We would be raising Rs 200 crore of Tier-II capital by September 2004 "" the maximum limit available to us," said S C Gupta, chairman and managing director, IOB while addressing a press conference in the city today.

When asked whether IOB had any plans making another public offer, Gupta said, "We have a headroom of 10 per cent with 61 per cent government holding, but as of now we do not have any intentions of approaching the primary market and our capital adequacy ratio of 12.49 per cent puts us in a comfortable position as far as our business targets are concerned."

The bank has targeted a 17 per cent growth in advances as well as deposits in the current year. "We have targeted a Rs 10,000 crore incremental business volume, of which as much as Rs 3,000 crore would be advances. Retail would contribute around Rs 1,000 crore, while the SME sector was expected to contribute another Rs 500 crore," Gupta said.

Retail portfolio at IOB was targeted at 20 per cent of the total business by the next couple of years, which at present stands at 13.8 per cent.

IOB expects to generate business in excess of Rs 70,000 crore during the current fiscal against Rs 62,000 crore earned last year.

"W are confident of achieving domestic a business growth of Rs 8,000 crore, while the international operation business will increase by another Rs 2000 crore," he added.

On the net NPA front, IOB has targeted a 1.5 per cent figure by 2005, while the target for 2006 was pegged at 0.5 per cent.

Meanwhile, the bank has received approval for opening a representative office in China. Plans are to make the China representative office operational over six months.

"After China, we plan to open another representative office in Malaysia and a full-fledged branch in Canada. We are awaiting clearances from the host countries as well as the Reserve Bank of India," Gupta said.

At present, IOB has presence in Korea, Singapore, Colombo and Hong Kong. The total business turnover stood at Rs 2,000 crore and an operating profit of $10.85 million.

The bank is targeting a growth of 30 per cent in operating profit from overseas operations during 2004-05. Except Singapore, all the overseas offices have nil net non-performing asset.