Plan to increase deposits by 17 pc: Allahabad Bank

Kolkata, Oct 3: Allahabad Bank, one of the forerunners among the country's public sector banks, is eyeing a loan growth of 20 per cent and 17 per cent increase in deposits during the current fiscal.

Allahabad Bank Chairman and Managing Director (CMD) K R Kamath told the mediapersons in a press conference held on Friday, Oct 3 that the bank would maintain a net interest margin of 2.75 per cent as well as a Capital Adequacy Ratio (CAR) of 11 per cent during the current fiscal. Estimating small and medium enterprises (SMEs), steel, cement and commercial real estate sectors to be the drivers behind the targeted growth in loans during FY'09, he informed that the bank's CAR currently stood at 11.68 per cent.

According to him, the Allahabad Bank had a headroom for raising Rs 2,500 crore in Tier-I and Tier-II capitals.

''There is no immediate plan to raise fund through the route. We will wait for an opportune moment in this regard. We are also not keen to dilute the government's stake in the bank,'' Mr Kamath remarked.

The government's holding in Allahabad Bank stood at 55 per cent.

Furthermore, Allahabad Bank entered into a distribution pact with Universal Sompo General Insurance Co Ltd (USGICL) for the distribution of general insurance products of the latter to its customers from November 1.

The agreement was inked between Mr Kamath and USGCIL Executive Chairman O N Singh.

The USGICL was floated as a joint venture (JV) company by Allahabad Bank by entering into an agreement with Japan-based Sompo Insurance Inc, along with other Indian partners like Indian Overseas Bank, Karnataka Bank Ltd and Dabur Investment Corporation. Allahabad Bank holds a majority stake of 30 per cent in the JV.

''While the insurance business is expected to generate Rs 400 crore annually in the next three years, with motors as well as health policies contributing 60 per cent and fire schemes adding 15-25 per cent, in this regard,'' Mr Singh observed.

At least 30 insurance products, belonging to various non-life sectors, are likely to be launched by the USGICL during the next month, the executive chairman informed.

UNI