Lord Krishna Bank In Spread Path

The Kerala-based Lord Krishna Bank (LKB) has chalked out a plan to increase its network by 25 branches per year.

"We are opening a branch at Andheri east in Mumbai next month and planning to open two more in Mumbai and one at Coonoor shortly. We have approached the Reserve Bank for more licenses to expand the branch network and have a national presence," V K Gupta, executive director of the bank, said.

Of the 94 branches that the 62-year-old bank has, 67 are located in Kerala and the rest are spread across the country. With almost no presence in the eastern region, the bank is now planning to focus on this region for expansion.

The bank is also planning to install 50 offsite ATMs in the next twelve months and interconnect 90 per cent of the branches in the next six months.

The bank currently has 20 ATMs. It is negotiating with a major private sector bank to launch a co-branded debit card as well as an ATM card shortly.

It has recently tied up with Western Union Financial Services Inc. for money transfer services. Currently 51 branches of the bank are offering money transfer services to the customers.

The bank has also firmed up its plans for the proposed boutique branches which would offer a wide range of financial products such as mutual funds, insurance, depository services and debit cards. It is negotiating with two insurance firms, one in life and the other in non-life for foray into insurance distribution.

For the year ended March, LKB had a total business volume of Rs 2,350 crore, with deposits at Rs 1,502 crore and advances at Rs 849.5 crore. It is aiming at Rs 4,000 crore business volume and a 7.5 lakh customer base by end of this fiscal.

Its net non-performing assets were at 9 per cent and the bank plans to reduce them to 5 per cent level in the current year.

Meanwhile, LKB is planning to go for an initial public offering with an issue size of Rs 100-150 crore. The bank currently has a capital base of Rs 56.69 crore and there are about 11,000 shareholders.

"We made a Rs 35.75 crore rights issue in February this year at Rs 12 per share, which got oversubscribed and we are looking at same price for the IPO too. However, the timing of the issue depends on the stock market situation," Karan Anand, director of the bank, said.

"The IPO is primarily meant to augment our capital base and further improve the capital adequacy ratio, which is currently at a healthy 16.5 per cent, thanks to the rights issue and the Rs 52 crore reserves position," Anand said.