The Hindu Business Line : Corporation Bank gearing for growth via acquisitions

Speaking to reporters here on Thursday, the Chairman and Managing Director of the bank, Mr V.K. Chopra, said, "We have no firm proposals on hand, but we are not averse to it. And we have the capacity to do it since we have a very strong capital-to-risk weighted asset ratio."

Corporation Bank currently has a CRAR of 17 per cent, the highest among public sector banks. Almost 90 per cent of this capital comprised Tier-one capital — equity plus reserves. The bank's net worth till the second quarter end was in excess of Rs 3,000 crore.

For the third quarter, he said profits would be higher than the corresponding period of last year though he declined to assign any figure to it. But the bank had made recoveries of Rs 136 crore so far during the year, he said.

The recoveries would contribute to the profits for the third quarter. The bank had among the lowest gross non-performing asset ratio at about 3 per cent of the advances.

The gross NPA till the second half of this year was about Rs 690 crore.

Mr Chopra said Corporation Bank had also sought permission from the RBI for opening a representative office in Dubai and a full-fledged branch in Hong Kong.

The proposal for a representative office, he said, was pending before the monetary authorities of the United Arab Emirates.

In addition, the bank proposed opening 35 more domestic branches during the current fiscal, mostly in the western and northern regions. All these branches would be CBS (core banking solutions) ready. Already 83 per cent of the 800 odd branches of the banks were CBS-compliant and efforts wereunder way to ensure that the rural branches were also brought within the CBS, he said.

Besides, the bank planned to make available 1,825 service outlets to customers across the country. For the purpose, it proposed to install another 125 ATMs over the next three months.

The bank already has the largest ATM network among the public sector banks. At least nine other banks have arrangements to share the Corporation Bank network. This sharing arrangement currently generated additional revenues of Rs 2 crore, Mr Chopra said. The bank would exceed the business (credit + deposits) target of Rs 55,000 crore for the current financial year. So far it had achieved Rs 51,000 crore. The bank, this year, had so far shown a credit growth of 28 per cent.

Corporation Bank would not require additional Tier-I capital to sustain its high credit growth in view of its comfortable capital position.

Besides, he said, the bank had sufficient flexibility to raise Tier-II capital in the form of bonds.