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IOB banks on retail advances for growth

Mumbai, Aug. 26: Chennai-based Indian Overseas Bank (IOB) sees retail advances touching 25 per cent of its total advances in the next three years.

At present, retail advances account for around 17 per cent of the bank’s advances at Rs 18,431 crore. Growth in the retail portfolio would be accompanied by efforts to boost both the fee and non-fee based income of the bank, said chairman and managing director S. C. Gupta.

IOB is coming up with a public issue of 10 crore equity shares at a premium of Rs 14 per share in September. The Rs 240-crore issue will be open from September 5 to September 12. The proceeds of the issue will be used to augment the capital base of the bank.

The offering will increase the bank’s equity capital to Rs 544.8 crore from Rs 444.8 crore as on March 31, 2003. Post issue, the government’s holding in the bank will come down to 61.23 per cent from 75 per cent.

Replying to a query on the return of capital to the government, Gupta said that while the bank had initially planned to return Rs 75 crore, no decision had been taken as the pricing issue was yet to be solved.

During 2002-03, the bank’s gross profit increased to Rs 794.13 crore from Rs 616.36 crore while net profit rose to Rs 416.10 crore (Rs 230.21 crore). Gupta added that this growth was aided by a strong rise in the interest income of the bank.

IOB has 1,427 branches and it is now planning to implement ‘any branch banking’ across 500 branches by the end of this year.

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