BoR plans to buy Rs 500 crore corporate assets from banks

Bank of Rajasthan (BoR) hopes to acquire portfolio assets of Rs 500 crore from banks with strained capital adequacy ratio (CAR). The bank also hopes to turn into a zero non-performing asset (NPA) enterprise by 2006.

"We have already acquired home loan assets of Rs 100 crore from a private bank through book building process. BoR has a huge daily surplus and the entire amount could be theoretically used to acquire portfolio assets but we would probably end up acquiring Rs 500 crore of assets from banks," explained K M Bhattacharya, managing director.

BoR is interested in acquiring A-rated corporate loans to blue chip companies from banks that have capital adequacy problems.

Last year, the bank bought loan assets from five large blue chip companies totalling Rs 150 crore.

"The thrust this year is also on blue chip companies and large corporates with good rating from credit rating agencies. We also intend to provide 90-day loans to these corporates," Bhattacharya said.

Talking about business volumes, Bhattacharya said the bank has targetted a Rs 120 crore net profit for 2003-04.

It hopes to achieve deposits of Rs 7,500 crore against Rs 6,200 crore achieved in January this year. Advances, on the other hand, are expected to touch Rs 2,800 crore against Rs 2,300 crore already achieved.

On NPAs, BoR is likely to reduce the figure from 7 per cent last year to 5 per cent this year. "Net NPA at the bank is close to Rs 150 crore and we hope to wipe it off through adequate provisioning in the next three years," the managing director explained.

BoR is looking at textiles, pharmaceuticals, engineering and retail for boosting its credit deposit ratio which is at a dismal 40 per cent.

In the retail segment, the bank hopes to witness credit disbursal growth in vehicle, education loans and mortgage segment.

The bank has struck a deal with UTI Bank for a Rs 100 crore deposit placement. BoR intends to enhance its presence to 500 branches by 2006 from the current 387 and plans to be present in all state capitals.

The bank plans to open branches in Guwahati, Ranchi, Patna and Raipur and is also looking to set up 150 ATMs.