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| Corporation Bank will have to learn to take the heat in the ret ail segment from its far more aggressive private sector peers
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| The origin of the latest stock market rally can be traced to the announcement of the Securitisation Bill.
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| Prior to the announcement, any mention of the Indian banking sector at the bourses referred to private sector banks which recorded smart growth rates. The Securitisation Bill changed that equation.
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| Nevertheless, even in the times when PSU banks were looked on as poor country cousins of their private sector peers, banks like SBI and Corporation Bank were still referred to with a certain air of reverence.
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| I still remember the words of R S Hugar who was at the helm of Corporation Bank when it first forayed into the capital market in 1997.
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| Over a cup of tea at his bank's main office in Mumbai, he parried most of the questions I threw at him, saying his bank would hold its own even in the face of changing times and technological advances.
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| The bank has indeed made fair strides over the years and emerged as one of the better-managed banks.
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| Corporation Bank has been able to outperform the industry over the last five years and has set aggressive targets for the next five yeas, including achieving business volumes of Rs 70,000 crore along with a compounded annual growth rate (CAGR) of 23 per cent in net profits by 2006.
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| With a view to improving its fee-based income, the bank has been named by LIC as its corporate agent for marketing insurance products. The tie-up has been sealed with LIC taking a 27 per cent stake in the bank.
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| Corporation Bank was originally incorporated in 1906 under the name of Canara Banking Corp. It was one of the six private banks to be nationalised in the second round of nationalisation in 1980.
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| During the 15-year period before nationalisation, its deposits grew nearly 15 times to Rs 307.94 crore. Unlike some of its peers, the bank maintained its growth performance even after nationalisation.
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| In 1994, the government re-capitalised it to the extent of Rs 45 crore. In October 1997, the bank made a well received IPO at Rs 80 per share.
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| Cor poration Bank is one of the few PSU banks to have been granted operational freedom. The bank, headquartered at Mangalore in Karnataka, ranks among the fastest growing and nimble PSU banks.
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| It has 652 branches spread over 21 states and two union territories. The bank was one of the first to commence gold trading. It is also a leader in cash management services.
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| Where does Corporation Bank rank on a SWOT (strengths, weaknesses, opportunities and threats) snapshot?
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On the positive side, its tie-up with LIC is strategically important. It offers tremendous scope for the bank to leverage upon the size and reach of LIC. This will help the bank in two key areas
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