The Hindu : Business : CBoP achieves better CD ratio

Online edition of India's National Newspaper
Saturday, Nov 24, 2007
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CBoP achieves better CD ratio

Special Correspondent

CDR improves after merger with LKB

Bank has total business turnover of Rs. 33,000 crore
CBoP in the forefront in retail exchange dealings

KOCHI: Shailendra Bhandari, managing director and CEO of Centurion Bank of Punjab (CBoP), said here on Friday that the bank’s credit deposit ratio was around 80 per cent, a ‘considerable improvement’ after its merger with the Kochi-based Lord Krishna Bank.

He said the bank had total business turnover of Rs. 33,000 crore and was now considered to be the largest new generation private bank in the northern parts of the country. It was the fourth largest, after ICICI, HDFC and UTI Banks, among the new generation banks. He said the merger with LKB would help the bank gain prominence in the south. The branch network had increased to over 400. In Kerala, the LKB had 91 branches and nine extension counters with a strong presence in the rural areas.

Mr. Bhandari said the CBoP had made its presence felt in the northern and southern parts of the country. The future growth lay in inorganic growth and the bank, instead of looking at geographical locations for growth, was focussing on the right size and scale to go ahead with future acquisitions. He hastened to add that there were no formal talks going on for merger or acquisitions and scotched rumours regarding a possible merger with any Kerala-based banks or for that matter with ING Vysya Bank.

Answering a question, Mr. Bhandari said the CBoP was in the forefront in dealing with retail foreign exchange. It has a tie-up with Bank Muscat, which is being leveraged to increase remittances from West Asia to States like Kerala. In Kerala, the total business was to the tune of Rs. 1,900 crore, with deposits crossing Rs. 1,000 crore. To another query, he said that pre-merger with LKB, the credit-deposit ratio of the CBoP was only 60 per cent.

He said the integration of LKB and CBoP was going ahead and by the first quarter of the next financial year, the process would be completed. Seventy-one out of the 124 branches of the LKB were under CBS (centralised banking solutions) and their integration would be done earlier, he said.

Sixty four per cent of the total lending in Kerala was for the retail sector (with 30 per cent for home loans, 20 per cent personal loans, 16-17 per cent for commercial vehicle loans and the rest for small loans). In the non-retail sector, 30 per cent was for small and medium enterprises. The bank also laid emphasis on gold loans, which was a niche area for LKB, and select educational loans, said U.K. Sethumadhavan, regional head of the Centurion Bank based in Bangalore.

The bank had licence to open 20 more branches this financial year. Plans are on the anvil to have onsite ATMs at some branches in Kerala, they said. The Bank had a net NPA of 1.59 % which is one of the lowest in the industry.

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