Allahabad Bank to raise Rs1,400 crore this fiscal

Apart from this, the bank has also sought Rs1,000 crore from the government. It also hopes to gain market share in the merchant banking space through its merchant banking subsidiary AllBank Finance Ltd.

The lender has also been selected by the ministry of small-scale industries as the best bank financing medium & small-scale industries. JP Dua, chairman and managing director, tells DNA about the bank’s future plans and growth targets. Excerpts:

What kind of business growth do you expect by fiscal-end?
In the April-June quarter, we achieved an overall business growth of around 24%. We expect to end the fiscal with a 25% growth, which will mean a total business of around `2,200 crore.

What will be your focus areas to maintain growth?
On the asset side, we will focus on current account & savings accounts. We plan to open 23 million savings accounts in the next four years. On the liability side, our focus will be on medium & small scale industries sector loans and retail finance. In retail loans, we will focus on vehicle, home and education loans.
We have tied up with Ashok Leyland and Ural India for financing commercial vehicle purchases. We have a similar tie-up with Maruti for passenger vehicles. Talks are on with more automobile manufacturers for similar tie-ups.

How is your bancassurance business doing?
It is doing extremely well. Last year, we sold 1.2 lakh LIC policies and we hope to maintain the figure this year.

Do you have plans to raise capital from the market during the current fiscal?
We have headroom to raise `2,600 crore from the market both in Tier-I and Tier-II segment.

Of this, we plan to raise `1,400 crore during the current fiscal and we will go for it as and when necessary. Apart from that, we have sought `1,000 crore from the government to fund our expansion plans.

Could you elaborate on these expansion plans?
We are planning to strengthen our overseas presence by opening branches in Hong Kong, Shanghai and Dhaka by investing around $35 million. The Shanghai branch will involve an outlay of $30 million and the balance $5 million is for the Dhaka branch.

Which region of the country will you focus on?
The entire Indo-Gangetic belt. Apart from that, we have plans to lay special emphasis on the south. We are increasing our branch and ATM network there. In western India, our focus will be Gujarat.

What are your plans for AllBank Finance?
We are activating it to capture business from other private players. Besides, the regular merchant banking activities, it will also participate in brokerage business.