Iob Open To Acquisition

Indian Overseas Bank (IOB) is open to mergers and acquisitions, provided it enhances the bank's capital adequacy ratio (CAR), chairman S C Gupta said.

"Also, the partner should be strategically placed so that there is synergy. It should not be a merger for the sake of increasing the number of branches," Gupta added.

IOB will raise another round of Tier II capital, thus enhancing its CAR from 10.82 per cent to a comfortable level. IOB has already received board approval for raising Rs 175 crore from institutions such as Life Insurance Corporation and banks.

Last year the bank raised Rs 245 crore as Tier I and Tier II capital, which increased its CAR to 10.82 per cent from 9.15 per cent.

On non-performing assets, IOB is expected to shortly send notices to defaulters under the Securitisation and Financial Asset Reconstruction Ordinance. IOB hopes to recover Rs 350 crore through cash recovery, upgradation and write-offs, of which it expects to recover Rs 225 crore in cash.

IOB recently received board approval for initialising the process and will start sending notices to account holders whose cases were not referred to the Board for Industrial Finance and Reconstruction (BIFR) or the debt recovery tribunal (DRT).

The bank might also consider another round of voluntary retirement scheme after it has completed it computerisation in full. "There might be some excess employees by the time we have completed our computerisation, but at the moment we are not keen on announcing any such scheme," Gupta said.

Meanwhile there was a mass promotion at the company where a total of 1,500 employees were promoted. Some 600 odd staff were promoted to officers level, another 300 were lifted from scale 2 to scale 3, and the rest were from assistant general manager level to deputy general scale. The promotions were primarily for two reasons, one, to reward performing employees and two, to correct the imbalance that was created as a result of the last VRS.

On the business front the bank has targeted a 16 per cent growth. It will also open another 75 new ATM this year. On the insurance front the bank has already tied up with LIC and National insurance for selling bancassurance products but "we are waiting for the corporate agency norm," explained Gupta.