Karur Vysya Bank aims Rs50,000 crore business in 2 years

Tamil Nadu-based Karur Vysya Bank plans to take its business from current Rs34,579 crore to Rs50,000 crore by March 2012 and to Rs125,000 crore by March 2016. To achieve this, the bank is looking at a credit growth and a deposit growth of 28% in the current financial year.

With more than 340 branches in operation currently, the bank aims to add another 50 by this financial year end. Its 11th branch in Mumbai and 18th in Maharashtra was thrown open to public on Wednesday. This branch is located in Kalbhadevi, which known for wholesale trading activities.

“This location has been chosen because of the wholesale and retail trade here. We are looking forward to a good credit demand from this area. We expect this branch to break-even in 1 or 2 years, despite the high rentals here,” said PT Kuppuswamy, managing director and chief executive officer, Karur Vysya Bank.

The mid-sized private bank will apply for 70 to 100 branch licences in the next fiscal. The bank aims to cover 50 villages in Tamil Nadu by October 2010 under its financial inclusion plans through business correspondent model.

As on June 2010, the bank’s establishment expenditure rose by 31% to Rs50.32 crore from Rs38.41 crore a year ago and by 3.45% a quarter ago. The cost of deposits was down from 7.89% in Q1FY10 to 6.51% in Q1FY11.

The bank’s net interest margins stands at 3.37% as on June 30, 2010 up from 2.78% a year ago. “We will take a call on interest rates both lending as well as deposit rates in a month or two. The rates may have to be hiked if liquidity is not maintained,” said Kuppuswamy.

The bank also launched its VISA enabled pre-paid foreign travel card on Wednesday.