Vijaya Not To Sell Housing Finance Pie

Nationalised Vijaya Bank has dropped its plan to divest up to 49 per cent of its equity in subsidiary, Vibank Housing Finance Ltd, and has also decided not to rope in a partner for its credit card operations.

Instead, it has decided to induct a professional from one of the leading housing finance companies as vice-president of the subsidiary.

"As our housing subsidiary is performing well, there are no plans at this stage to divest our stake. We plan to appoint a professional from the industry as vice-president to run the show," M S Kapur, chairman and managing director, said.

 

A top bank official said last year the bank was in talks with several players in the housing finance industry to sell up to 49 per cent in the housing finance subsidiary. The official said as housing finance was not its core business, it had decided to shed part of its stake.

Vibank Housing Finance posted a 21.71 per cent increase in net profit to Rs 2.57 crore during 2001-02 compared with the same period last year, while its total income grew 36.28 per cent to Rs 17.39 crore during 2001-02. Since its inception five years ago, the subsidiary has disbursed around Rs 174 crore worth of loans and mobilised deposits worth Rs 26 crore during the same period.

The current CMD, Kapur said as the bank's credit card division was performing extremely well, there are no plans to rope in another partner.

Kapur had earlier said the bank plans to induct professionals in each of its operations to accelerate its growth. Kapur said he expects to double the bank's business to around Rs 40,000 crore in three years. Hence, over 100 professionals including MBAs, software engineers and cost accountants will be recruited soon to carry out the ambitious plan of the bank.

Kapur said its insurance venture had been delayed because all the necessary clearances had not been received thus far. The other partners of the insurance venture are Zurich Insurance Group, Punjab National Bank and DCM Sriram Consolidated. Vijaya Bank has a 12.5 per cent stake in the insurance venture.

Vijaya Bank posted a 85 per cent increase in net profit to Rs 130.9 crore during 2001-02, while its total income increased by 14.2 per cent to Rs 1,727.33 crore.

Percentage of net NPAs to net advances declined to 6.02 per cent from 6.23 per cent, while capital adequacy ratio rose to 12.25 per cent during 2001-02 from 11.5 per cent during the previous year. The bank currently has 828 branches which will be increased to 1,000 in two years. The bank has 52 lakh account holders.