Corporation Bank has set a Rs 8,000-crore deposit mobilisation and Rs 3,500-crore advances target in 1997-98. In terms of capital adequacy ratio, the bank is confident of surpassing its present level of 11.3 per cent to 16.8 per cent.
Speaking to newspersons, the bank's chairman-cum-managing director, R S Hugar, said Corporation Bank has decided to start a new phase by entering the capital market with an offer of 3.80 crore equity shares of Rs 10 each at a premium of Rs 70 per share. The government will have a post-issue stake of 68.3 per cent in Corporation Bank in such an event, Hugar said. He added that the bank's pricing is much more moderate.
He justified the ensuing issue by saying that the bank has suffered no loss in its long existence and it was time the bank accessed the capital market. This forms part of the bank's future plan for the next three to six years. However, the capital base of the bank will remain small in comparison with major banks. But it will still be easy to service with the capital size of Rs 120-crore which now stands at Rs 82 crore.
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During 1996-97, Corporation Bank recorded a return on networth of 34.5 per cent, one of the highest among public sector banks. In 1996-97, the net profit of the bank increased to Rs 125.13 crore from Rs 104.75 crore the previous year, after making all required provisions. The bank has achieved this mostly through fee-based activities. The capital adequacy ratio stood at 11.3 per cent against the prescribed norm of 8 per cent. The bank will aim at reaching a Rs 8,000-crore deposit mobilisation target by the end of the current year against Rs 6,673 crore in 1996-97. In case of advances, the target of Rs 3,500-crore in 1997-98 is achievable against Rs 3015 crore in 1996-97, it hopes.
Hugar said in three years time Corporation bank would have 750 branches and at the end of the current year this would go up from 525 to 590 branches. In the eastern region, the nine new branches would be set up by March next year.