IOB chooses internal funds, rules out follow-on IPO

Kochi, May 22: Indian Overseas Bank Chairman and Managing Director T S Narayanasami today said the bank will solely depend on the 'impressive' internal fund generation instead of a follow-on IPO for its expansion plans.

Speaking to newspersons here after opening a new Field General Manager's office, with powers to take decisions at the highest level instead of waiting for head office clearance, he said the new office would promote and generate more business in Kerala.

The banking sector was on a tightrope walk and resources were scarce with the stock market, real estate and gold prices fluctuating, he said.

The IOB, which registered a huge growth, was hoping to garner additional Rs 3500 crore of deposits this year.

He said current business volumes had crossed Rs 10,000 crore and deposits had risen to Rs 50,529 crore in 2005-06 as against Rs 44,241 in the previous year.

'We have sufficient internal funds for expansion. We will cross nine per cent in capital adequacy in June this year to cope with the Basel II norms', he added.

The bank with 118 branches in Kerala was hoping to improve its business from Rs 3800 crore to Rs 5500 crore during the current fiscal year, Mr Narayanasami said.

Pointing out that the bank's gold import scheme was a big success, he said the bank would import gold worth Rs 300 crore this year from Switzerland.

The IOB Chairman said the bank would improve its credit ratio from 43 per cent with a thrust on priority sector, but would go slow on housing sector that had highest default rate in the industry.

UNI