Allahabad Bank to raise money through QIP route in next fiscal year

The bank will focus on SME and retail sector for credit disbursement growth

Public sector lender Allahabad Bank would raise Rs 330 crore through a qualified institutional placement (QIP) in second quarter of the next fiscal year. This was informed by Arun Tiwari, Executive Director of the Bank in an interaction with Business Standard in Chandigarh. It is worth mentioning that the centre government has already decided to infuse Rs 400 crore in the bank in the current fiscal year.

The bank will focus on small, and medium enterprise (SME) and retail sector for credit disbursement growth. On being asked about the thrust area, he added, “We are trying to give a push to the retail and SME sector We are more focused and expanding our business in the area of retail lending and MSE Sector for which there was abundant scope in India. The Bank has already crossed business of Rs.3,10,000 crore and we have set a business target of Rs. 3,60,000 crore by March 31, 2014.” He added that the Bank is expecting a credit growth of 16-18% and a deposit growth of 18% in the current fiscal year.

Further, Net interest margin(NIM) of the Bank was 2.75% during the second quarter and the state-run lender aims to improve its net interest margin to three% by the end of this financial year.

Having, already sold stressed loans to asset reconstruction companies (ARCs) worth Rs. 732 crore in the first six months of the current fiscal year, the Bank is planning to continue to explore opportunities to sell stressed assets. He added, “ We hope to sell stressed loan worth Rs. 500 crore to ARCs in the remaining period of the current fiscal year.

The Bank has a network of 2753 branches located in different areas of the country catering to the needs of the customers. Having significant presence in Northern and Eastern India, the Bank is now focusing on Western and Southern region for advances and deposit growth. Having already opened around 75 branches across the country in the current fiscal, the Bank has plans to open over 200 more  branches during the current financial year. He added, ‘ The majority of the branches would be in southern and western region as it has huge potential and further we wants to strengthen our network there.”He also added that Bank has plans to open a branch in Dhaka by March 2014. At present it has a branch in Hon Kong and a repo office in China.