Corporation Bank to set up branches abroad

Following the recommendations from the Boston Consulting Group, Corporation Bank is looking at the overseas market.

The Mangalore-based bank will take the proposal to the board in April.

"The bank will initially look at 7-8 countries in the Gulf region. We are also interested in markets in Hong Kong and Singapore," Corporation Bank officials said at the sidelines of a press conference to launch a new loan scheme targeted at farmers and commodity traders.

The scheme, launched in association with Multi Commodity Exchange of India Ltd, is aimed to mitigate the potential losses being incurred by farmers, particularly on the price front.

BCG will also submit a business process re-engineering plan for Corporation Bank in April.

The consulting group has also suggested that the bank enter the overseas market in as many as 30 countries. There are also plans to play up the bank's brand image and extend its training programme for its employees.

"We have applied for 16 new branch licences. Most of them are in semi-urban and rural areas since we have a shortage of branches in upcountry areas," said V K Chopra, chairman & managing director, Corporation Bank. The branches will be the states of Haryana, Uttar Pradesh and Punjab.

The bank expects to post a 20 per cent growth in its total business in FY 04-05. Total assets is expected to be over Rs 18,000 crore (Rs 180 billion) in March 2005 up from Rs 13,800 crore (Rs 138 billion) in March 2004. Total depositsis expected to cross Rs 26,000 crore (Rs 260 billion) from Rs 23,190 crore (Rs 231.9 billion) in the previous year.

The bank's credit is expected to grow by a 30-33 per cent in FY 04-05. "This is a very high rate of growth, highest in recent years. In absolute terms it translates into Rs 4,500 crore (Rs 45 billion)," said Chopra.

The bank's net interest margin for the year is expected to 3.97 per cent with the net NPA just over 1.4 per cent.