IOB eyes acquisition

Indian Overseas Bank is on the lookout for acquiring either a public or private sector bank. The bank is in talks with several potential ban...

int(3)

Indian Overseas Bank is on the lookout for acquiring either a public or private sector bank. The bank is in talks with several potential banks and the acquisition plan will firm up by February.

The bank has also raised its deposits rates by 0.25 per cent to 0.5 per cent on deposits of various maturities. IOB is also eyeing the option of tapping the capital market to augment its capital next year.

In an interview with The Indian Express, IOB Chairman and Managing Director S C Gupta said the bank is looking for buying out a bank but will maintain IOB’s brand and identity.

Story continues below this ad

According to Gupta, though the bank has hiked its deposit rates, there are no immediate plans to hike lending rates. “Keeping in mind the high inflation, we are not looking at any immediate hike in the lending rates”, Gupta said.

Presently, the spread on the rates for the bank is up to 3.82 per cent as compared to 2.42 per cent three years ago, he added.

To top it, the bank’s cost of deposits has fallen from 7.8 per cent to 4.92 per cent as on September 2004. “The low cost of deposits and the high spread will not impact margins much due to the hike in the deposit rates”, Gupta added.

After the public offer in September 2003, the bank’s capital adequacy has gone up to 13.47 per cent from the earlier 12.49 per cent. However, the Bank might look at another public offer to augment the tier-II capital next year, Gupta said.

Story continues below this ad

IOB’s gross NPAs has dipped from 7.5 per cent in March 2004 to 6.06 per cent in September 2004, he added.