Seeks licence for opening offices in Saudi and Oman. | |
| Andhra Bank, which opened its office in Dubai last month, is planning to spread its presence across West Asia. |
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| It has applied to the Reserve Bank of India to open offices in Saudi Arabia and Oman. The bank's board has also approved the proposal to set up offices in Qatar and Kuwait. |
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| "We also want to open an office in Bahrain. In fact, we are going to become an important liaison between India and the Middle East in trade and the infrastructure sector," Chairman and Managing Director K Ramakrishnan said. |
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| According to Ramakrishnan, the new office in Dubai, the first outside India in the bank's 80-year history, will help speed up remittances from non-resident Indians to families back home. |
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| "Our idea is to spread strategically in the Middle East where a lot of people from Andhra Pradesh (AP) and Kerala are working," he said. |
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| The bank is also planning to open an office in the US to cater to the business needs of Indians living there. Ramakrishnan, however, said that this would take some time. |
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| On the domestic front, the bank is planning to open 100 branches and an equal number of ATMs in the current year. The bank has 1,213 branches, of which 878 are located in AP. |
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| "We are actually Andhra-centric, which is our strength," the bank's chief said. Ramakrishnan is undeterred by growing interest rates. |
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| "The rate hikes are negligible," he said expressing confidence that credit offtake would pick up. He was expecting a robust 20-25 per cent growth in the bank's credit offtake in the current fiscal. |
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| He said the bank was fully geared up to adopt Basel-II norms. It has the "best" capital adequacy ratio (14 per cent) among all public sector banks. |
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| "If necessary, we can raise over Rs 1,000 crore tier II capital but we don't require any additional capital for the next two years," he said. |
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| In the post-Basel II period, according to him, the major challenge for banks would be how to improve the margins. In this regard, he said that strengthening the treasury portfolio, augmenting fee-based income, raising low-cost deposits, reducing non-performing assets, improving recoveries and avoiding slippages would be helpful. |
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| In this context, Ramakrishnan said, Andhra Bank had targeted to increase its fee-based income from Rs 27 crore last year to Rs 50 crore this year. |
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| The bank's low cost deposits increased to Rs 12,318 crore during 2005-06 from Rs 9,959 crore in the previous year. The cost of deposits stood at 4.86 per cent. |
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| On the other hand, the bank's non-performing assets declined to 0.24 per cent from 0.28 per cent during the same period. |
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