Takeover news false: Karnataka Bank MD

The Karnataka Bank Ltd (KBL) is not facing any takeover moves and reports to that effect are all “rumours”, according to managing director and CEO, P Jayarama Bhat. According to him, the bank is, in fact, looking at increasing its export credit from the current Rs 1,500 crore to Rs 2,500 crore in the current financial year (FY13).

“The Reserve Bank of India (RBI) said it was advisable to have export credit at 12 per cent, and we were planning to achieve that. We have a target to reach about Rs 2,500 crore of export credit. We are at around Rs 1,500 crore now, so there is a Rs 1,000-crore gap. We are planning to cover this in 2012-13,” said Bhat.

 

KBL raised Rs 250 crore through tier-II bonds in November and this has augmented the bank’s capital to meet requirements for the time being. The capital adequacy ratio is 13 per cent, though RBI has set the standard at eight per cent. Bhat said, “We are comfortable and have enough headroom to grow in the current situation.” He said the bank had plans to increase business turnover to Rs 1 lakh crore by 2015, growing at 25 per cent this financial year and 30 per cent in the long term.

Right now, the bank has a total business turnover of Rs 56,800 crore, expected to be increased to Rs 65,000 crore by March 2013, according to a KBL official. This would include advances of Rs 26,000 crore.

Responding to queries on reports of a takeover bid by a major private bank, Bhat said, “Those rumours are all false. We being in the private sector and our shareholders widely spread, there are no such moves of mergers and acquisition as far as Karnataka Bank is concerned.”

He added nobody had approached KBL with a takeover offer. “We have been denying the reports in every forum. There is no such thing at all,” he averred.

With about 514 branches at present, the KBL has plans to increase the branches to 550 by the end of March 2013. According to the bank’s officials, KBL recently entrusted business process re-engineering to KPMG Advisory Services Pvt Ltd to accelerate growth.