Allahabad Bank to expand merchant banking arm
Public sector lender Allahabad Bank is planning to strengthen its merchant banking arm, AllBank Finance Ltd, by expanding to cities beyond the eastern region.
“The merchant banking arm has just completed one mandate, and we have a few more in hand. We have reconstituted the subsidiary's board and are now focusing on volumes. The merchant banking outfit would be expanded to 5-6 cities starting with Delhi ” said J P Dua, chairman and managing director, Allahabad Bank.
The net worth of AllBank Finance, at present, is close to Rs 44 crore.
The bank is expecting to have Rs 1,000 crore of capital infusion in the next six months.
The bank’s capital adequacy ratio was at 13.62 per cent as on March 31, 2010.
“Our CAR is above 12 per cent and the Tier I capital is also more than eight per cent at about 8.02 per cent. We have, however, sought Rs 1,000 crore from the government during this financial year to fund our growth targets.
We understand that our application has been processed by the government. We expect to get it in the next six months” Dua said.
He said the bank had a head room of Rs 2,600 crore in TierI and Tier II capital.
The bank aims to achieve a credit growth of about 20 per cent during this year
“We want to open more branches in places where we have a smaller presence such as the south, and parts of north India. These regions offer tremendous potential, we want to tap it.
We have the Reserve Bank of India’s authorisation for opening 68 branches during this fiscal,” Dua said. The bank also plans to set up 100 ATMs this year,” he added.
The bank is also working on evaluating a base rate and likely to announce it over the next seven-to-ten days.
“The base rate is being determined after considering many factors such as share of low-cost deposits among others,” he said.