Mumbai, Dec. 11: Vijaya Bank today said it intends to acquire a bank that has a strong base in northern India.
Though the Bangalore-based public sector bank has a network of 842 branches spanning all 28 states and four Union Territories, analysts say it has largely been perceived as a bank with a large presence in southern India. “It goes to show that even public sector banks are looking aggressively at acquisition as one of the means for growth,” the analyst added. Vijaya Bank announced that it was on the lookout for a good buy in a communication to stock exchanges today.
The bank, founded by A. B. Shetty and other farmers on October 23, 1931 in Mangalore, Karnataka, was essentially aimed at promoting the banking habit among the farming community of Dakshina Kannada district in Karnataka.
It became a scheduled bank in 1958 and was nationalised on April 15, 1980. Earlier this year, the bank entered the capital market with an initial public offering (IPO) aggregating Rs 100 crore. With the IPO, the government’s stake in the bank came down to over 72 per cent from 100 per cent. It was made to part-finance the bank’s plans to meet future capital adequacy requirements and to shore up capital funds for healthy asset expansion apart from higher profits.
Recently, it reported a net profit of Rs 37.74 crore for the second quarter of the current fiscal. For the first quarter this year, the bank had reported a net profit of Rs 40.77 crore. The reduced net profit was partly on account of higher provisions for the second quarter.
During the second quarter, the bank’s capital adequacy ratio stood at 12.37 per cent compared with 11.81 per cent in September 2001. While total deposits stood at Rs 15,309 crore, the bank also brought down high-cost bulk term deposits. Total credit was placed at Rs 6,612 crore. However, percentage of gross NPAs to gross advances of the bank was placed at 9.2 per cent.
The bank later announced that for the current fiscal, it was emphasising on computerising branches, installing 82 ATMs, opening around 20 new branches and 15 retail lending outlets.
Banking sources said Vijaya Bank’s possible target could be Bank of Punjab, says PTI.