Bom Plans Rs 140 Crore Ipo

Bank of Maharashtra (BoM) has decided to capitalise on its favourable balance sheet size to tap the capital markets 'at an appropriate time' with an initial public offer (IPO) of around Rs 140 crore, according to S C Basu, chairman and managing director, BoM.

Post-IPO, the central government's stake in the Pune-headquartered bank, which reported a 222 per cent jump in its net profit at Rs 145.41 crore in 2001-02 against Rs 45.19 crore in the previous year, will come down to 70 per cent and the capital of the bank will increase to around Rs 500 crore, he said.

Basu said the bank is eyeing a net profit of Rs 200 crore in the next fiscal. He added that for the first time in the history of the bank, the reserves and surplus (at Rs 376.20 crore) was more than the capital (at Rs 330.52 crore).

"The last financial year was not good for the banking industry. Despite declining interest rates in the last fiscal, credit absorption capacity was poor. In such a scenario we adopted a profitability strategy whereby we reduced all round costs and increased volumes," Basu said at a press conference late last evening.

Spread of the bank came down from 3.41 per cent in last fiscal to 2.91 per cent in 2001-02.

According to Basu, the bank has instituted a customer satisfaction survey whereby a customer satisfaction index would be drawn up to benchmark the performance of BoM's branches against competing branches of other banks.

Further, the bank has appointed the Hyderabad-based IDRBT to draw up a comprehensive information technology plan with a view to reduce the transaction costs and improve delivery efficiency.

BoM also plans to ramp up its automated teller machine network from 41 to 300 in the current financial year.

BoM plans to reduce its net non-performing assets (NPAs) from 5.81 per cent in March-end 2002 (7.41 per cent as at March-end 2001) to 4.10 per cent by March-end 2003.

It also plans to reduce its gross NPAs from 10.44 per cent (12.35 per cent as at March-end 2001) to 8.65 per cent.

In absolute terms, the net NPAs of the bank stood at Rs 480 crore as at March-end 2002 (Rs 498 crore as at March-end 2001) and the gross NPAs stood at Rs 906 crore (Rs 876 crore).