IDBI rules out IFCI, IIBI acquisition

Ruling out acquisition of ailing financial institutions Industrial Finance Corporation of India (IFCI) and Industrial Investment Bank of India (IIBI), the Industrial Development Bank of India on Friday said it aims at 16 per cent growth in business at over Rs 71,000 crore and plans to open over 300 branches in next two years.

The bank also eyes life insurance foray for which it has appointed Watson Wyatt as advisor, IDBI Chairman V P Shetty said after inaugurating a new branch. Embarking on a retail thrust, the bank expects its assets to grow to over Rs 90,000 crore by this fiscal end from Rs 81,500 crore till September.

"We expect loan advances to cross Rs 50,000-51,000 crore in this fiscal from about Rs 46,000 crore in 2004-05. We are also aiming at increasing our deposits to Rs 20,000 crore by march 2006, from Rs 15,000 crore last fiscal," he said.

The IDBI chief said the bank was trying to reduce its cost of funds by stressing on low cost deposits and reduce the reliance on bonds. Though IDBI has raised about Rs 4,000 crore in bonds this fiscal, Shetty said: "We will redeem previous bonds worth Rs 8,500 crore this fiscal."

After the merger of IDBI with its private banking arm IDBI Bank, the country's leading financial institution is now spreading its wings across the country.

IDBI had plans to increase its branch network to 200 by March next year, from the present 155 branches. "In two years, we will add 300 new branches," Shetty said.

The bank plans to foray into all important cities where it sees business opportunities. While stressing on organic growth, the IDBI chief ruled out inorganic growth as of now. "There is no proposal to take over IFCI and IIBI as of now," he said.