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AllBank closer to acquisition

Calcutta, Jan. 18: Allahabad Bank, keen on a mid-sized public sector bank in south India, will decide on the acquisition by March.

Chairman and managing director O. N. Singh said: 'We hope to have a strong balance sheet by the end of this financial year. We would leverage it for taking over a bank in south India.' He, however, refused to divulge the bank's name.

Allahabad Bank's public issue will hit the market before the board moves ahead with the acquisition. 'We expect our second public issue to hit the market in the second week of March. It will be done through book building,' Singh said.

The Rs 100-crore issue is expected to garner Rs 650-700 crore, based on the current stock price.

The bank, which also announced its third-quarter results today, said its net profit was Rs 462.47 crore in the April-December period compared with Rs 242.24 crore in the corresponding period last year ' an increase of 90.91 per cent.

Its net profit for the third quarter ended December 31 surged to Rs 159.25 crore from Rs 98.36 crore in the corresponding period last year ' a growth of 61.9 per cent.

Operating profit in the first nine months increased to Rs 851.58 crore from Rs 556.08 crore in the same period previous year. This reflects a spurt of 53.14 per cent.

Its total business touched Rs 58,828 crore on December 31. The bank expects to achieve a business of Rs 61,000 crore by the end of the current financial year, Singh said.

During April-December, total deposits increased to Rs 6665 crore ' a growth of 21.17 per cent over the corresponding period of the previous year.

The net non-performing asset (NPA) of the bank fell to 1.48 per cent on December 31 from 2.37 per cent in the year-ago period. In value terms, the net NPA has declined to Rs 293.63 crore in the first nine months from Rs 574.63 crore in the corresponding period of the previous year.

The bank has tie-ups with National Insurance, Life Insurance Corporation of India, UTI Mutual Fund and ECGC to sell their schemes. During the first three quarters of the current fiscal, the bank sold 80,000 policies with premium income of more than Rs 22 crore under these tie-ups.

As part of its international foray, the bank is sending a team to Kazakasthan to formalise a joint venture with Punjab National Bank. It is also planning to set up representative offices in China and Hong Kong.

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