Friday, November 6, 2009

Corp Bank launched loan syndication, plans to venture in general insurance in 6 months

State-run Corporation Bank has an aim to increase its banking business at the domestic level, in view of this it has launched loan syndication business and has plans to venture into the general insurance business in the next six months.

Corporation Bank Chairman and Managing Director J M Garg told, "We have launched the loan syndication business and have also taken up a proposal for a Rs 500 crore loan. The bank expects to increase its fee-income from the segment".

Loan syndication means pooling of advances by a group of lenders to alleviate risks.

He informed, for general insurance business, the bank is planning to form a separate subsidiary in a joint venture partnership, for this it has appointed a consultancy to search for a suitable partner.

Garg said, "We are thinking of setting up a subsidiary for the non-life insurance business. We have appointed a consultancy and the process is expected to take around six months time".

Garg informed to grow its banking business, bank’s main focus will be more on increasing its non-interest income and current, savings account growth. The bank hopes to increase its CASA by 30 per cent in the current fiscal.

He added bank has also set a target to grow its loan segment by 22 per cent in FY10, whereas the deposit base is likely to grow by 23 per cent during the period.

At present the net interest margin of the bank is 2.3 per cent, hopes to increase to 2.4-2.5 per cent in the second half of the financial year, informed Garg.

Garg pointed out by the year-end bank’s total business is likely to grow to Rs 1,50,000 crore from Rs 1,33,456 crore.

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