Allahabad Bank to open branches in China and Bangladesh

Chennai, Aug 3 (IANS) Public sector Allahabad Bank is planning to open branches in Hong Kong, Shanghai and Dhaka investing around $35 million, a top bank official said Tuesday.

‘We have decided to expand our overseas presence in Hong Kong by opening our second branch there and new branches in Shanghai, China, and Dhaka, Bangladesh. The Shanghai branch will involve an outlay of $30 million and the balance $5 million is for Dhaka branch,’ J.P. Dua, chairman and managing director, told reporters here.

According to him, the bank’s Hong Kong branch does a total business of around Rs.1,200 crore and the plan is increase the overseas business by three times over the next two years.

On the domestic front, Dua said the focus will be on expanding in the four southern states by adding new branches and focusing on auto, infrastructure and other sectors.

‘Next year we intend to apply to Reserve Bank of India (RBI) permission to open 150 branches,’ Dua said.

The bank is also activating its merchant banking subsidiary, Allbank Finance, to capture business from other private players.

About the bank’s core business – acceptance of deposits and lending, Dua said the bank is growing its CASA (current account and savings account) deposits and increasing its lending to infrastructure, retail and small and medium enterprises (SME).

‘Thirty five percent of our deposits consists of CASA and our plan is to increase the same by one percent. We plan to increase our retail lending portfolio by Rs.5,000 crore to Rs.14,000 crore. We expect advances to grow by 25 percent this fiscal over the previous year,’ Dua added.

He said the bank is planning raise around Rs.2,600 crore out of which Rs.1,000 crore will be from the Indian government.

He said the funds to be raised from the government may be in the form of a preferential or rights shares issue.

Asked about the bank’s advances that bear lower than the eight percent base lending rate, Dua said: ‘The total size of advances portfolio will be around Rs.2000 crore. It consists mainly of bill discounting and other facilities. They will be repriced soon. We don’t have any term loans lent at a rate below our base rate.’

According to him, the bank will start generating its non performing assets (NPA) from its computer systems by the end of this fiscal and will not result any spike in the NPA numbers.

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