Syndicate Bank eyes buyouts, 30% growth

Manipal-headquartered public sector Syndicate Bank plans to grow its business through the inorganic route. The bank, which is preparing for its second follow-on public issue, is ready to acquire a suitable bank.

Chairman and Managing Director C P Swarnkar said, "We don't have any proposal right now, but we are a very suitable candidate to make an acquisition. If any worthwhile proposal comes to us we will definitely give it a look."

He said the bank was currently busy finalising its second follow-on public issue, which was approved by the board last month. The bank aims to raise money to augment its capital adequacy ratio and meet the capital requirements as per the Basel-II norms. After the nationalisation of the bank in 1969, the bank has not made any acquisitions. Earlier, between 1954 and 1969, it merged with 18 banks in Karnataka with itself.

Swarnkar said the bank was expecting a growth of 30 per cent in FY08. In FY07, its total business stood at Rs 1.31 lakh crore. It reported a 44 per cent increase in total income to Rs 6,658.55 crore compared with FY06. Net profit went up by 33 per cent to Rs 716.07 crore in FY07.

"In resource mobilisation, our thrust will be on core deposits and more particularly on current and savings accounts. For lending, agriculture will be our main thrust area, along with SMEs and infrastructure. A major part of the growth in the current year will come from new products launched last year," Swarnkar said.

Last year, the bank added 2.5 million new customers through a special savings and current account campaign. In 2007-08, it aims to add another 3 million customers to take its customer base to 22 million by March 2008. "Our first preference this year is to continue various schemes launched last year and depending on the market requirements, we will introduce new schemes," Swarnkar said.

The bank, through its new Pigmy deposit scheme, aims to mobilise at least Rs 1,000 crore deposits this year.

He said the bank was gearing up to launch a new financing scheme for small and medium enterprises to meet their daily credit requirements. Any individual or establishment engaged in economic activity would be extended loan up to Rs 1.5 lakh.