By IANS,
Chennai : The city-based Indian Bank has plans to expand its distribution reach within and outside India by adding new branches, ATMs and increasing the headcount by 1,000, a top bank official Saturday said.
“We will be opening 195 new branches this year and set up 1,250 ATMs this year. We will also be hiring 1,000 employees this year. The bank also plans to increase its overseas presence by opening new branches in Jaffna and Kandy in Sri Lanka and Jakarta in Indonesia,” T.M. Bhasin, chairman and managing director (CMD) told reporters here Saturday.
About the bank’s plans in Sri Lanka, he said the Indian government has decided to lend Rs.1,000 crore as assistance to the island nation towards rehabilitation of internally displaced Tamils there and “in order to channel the assistance through our bank we are opening a branch in Jaffna”.
There is also good business potential in Kandy,” he added.
Presently the bank has one branch in Colombo doing a total business of around Rs.800 crore (deposits Rs.300 crore and advances Rs.500 crore).
Indian Bank’s distribution reach comprises 1,764 branches, 41 extension counters, 20 satellite counters and 1,010 ATMs.
Bhasin said the bank closed the first quarter of the current fiscal with 11 percent growth in net profit and total income and 24 percent increase in total business (deposits and advances).
Indian Bank earned a total income of Rs.2,477.25 crore and a net profit of Rs.368.14 crore for the period ended June 30, 2010 as against Rs.2230.39 crore and Rs.331.66 crore earned for the corresponding period of the previous year.
Bhasin said the net interest income rose by 25.6 percent on year on year basis to touch Rs.926.65 crore in the first quarter.
The bank’s total business went up to Rs.159,027 crore (deposits Rs.91,000 crore, advances Rs. 68,027 crore) during the period under review up from Rs.128,700 crore (deposits Rs.76,716 crore, advances Rs. 51,984 crore) posted during the first quarter of the previous fiscal.
“With revenue from treasury operations going down, we have moved sizeable funds for lending,” Bhasin added.
However the gross non performing assets (NPA) and net NPA showed an increase to 1.45 percent and 0.76 percent respectively during the first quarter as against 0.91 percent and 0.19 percent reported for the corresponding period of the previous year.
According to Bhasin, part of the reason for the increase in NPA is that the bank has migrated to computer generated NPA data from the manual process which in turn has added Rs.838 crore to the NPA.
“We are the first nationalised bank to generate NPA from core banking solution (CBS). The NPA is now monitored at the head office level under a general manager on a daily basis,” he said.
“Though all the branches came under CBS in 2008, a lot of data had to be cleaned. The cleaned up NPA data is what we have declared now,” he said
Queried about the bank’s loan portfolio with a lending rate that is below its base lending rate of 8 percent, he said: “It is around Rs.6,000 crore and these will have to be repriced. Since bulk of the loans is for corporate and most of the other banks have similar base lending rate, we don’t expect foreclosure and migration of borrowers.”