Vijaya Bank may acquire north-based bank

Vijaya Bank is likely to explore the possibility of acquiring a bank with a large number of branches in north India by 2009, according to Chairman and Managing Director Prakash P Mallya.

The bank has identified two-three banks for the purpose, but was reluctant to divulge the names. "It will be a marriage between the south and the north. We are eyeing a north-based bank because of our rather weak presence in north India. Of the total 985 branches, 432 are in the south. Hence, we really need to expand our branch network. So we will consider a merger or acquisition that may happen in 2009," he said.

Addressing a press conference here today, he said that Vijaya Bank would go for further expansion of capital of Rs 300 crore in the current financial year. The exact route of the follow-on issue is yet to be decided, but this will be an upper tier-II instrument, he said.

The branch network will be enhanced to 1050 by March 2008 from the current level of 985. The bank is in receipt of licences for opening 70 branches and 15 more branches will be added within two months. About 30 more will be opened in major metros and urban centres.

The first ever overseas office will also be opened in the current financial year as applications for opening offices in China, Hong Kong and Dubai are pending with the Reserve Bank of India (RBI). Application for opening office in Malaysia will be submitted soon. The number of ATMs will be increased to 375 from the present 111, by the current financial year end.

He opined that the lending rates might come down by 0.25 "�0.50 per cent in select sectors like SME, manufacturing and infrastructure after two months provided the inflation rate remains stable at 4.5 per cent. By the end of current financial year, the bank's total business is expected to cross Rs 76,000 crore comprising of total deposits of Rs 45,000 crore and advances of Rs 31,000 crore. As on June 30, 2007, total business was Rs 64,447 crore with deposits at Rs 39,742 crore and Rs 24,735 crore advances, a growth of 37.77 per cent. He also said that all the branches would be under CBS by March 2009 and 675 branches that handle 90 per cent of the total business will come under CBS by March 2008.

Vijaya Bank has 60 branches in 12 districts of Kerala and will open five more soon. The new branches will be at Vizhinjam, Kazhakkoottam, Thirumala, Kaloor and Chevayoor. The bank also plans to add 10 more ATMs at various locations. Jairam Shetty, general manager, Kochi branch said the Kochi region covers all districts except Kasargode and would achieve a total business of Rs 1700 crore by 2007-08 from the current level of Rs 1470 crore.