Corpn Bank Q3 net up 10% to Rs 91 cr

Mumbai, January 23: | Updated: Jan 24 2002, 05:30am hrs
Riding high on its treasury operations, Corporation Bank has registered a 10.20 per cent growth in its net profit to Rs 91.45 crore during the third quarter ended December 31, 2001 as against Rs 82.96 crore in the corresponding period of the previous fiscal. Total income grew 15.5 per cent to Rs 602.08 crore (Rs 521.10 crore) in the same period.

During the first nine months in this fiscal, net profit grew by 21.30 per cent to Rs 262.73 crore, from Rs 216.51 crore in the corresponding period. Gross profit was at Rs 482.21 crore (Rs 393.95 crore), a growth of 22.40 per cent. Total income stood at Rs 1,481.45 crore (Rs 1,316.43 crore).

The contribution of treasury operations stood at Rs 108.55 crore (Rs 35.50 crore) during the three quarters, while it was Rs 43.18 crore (Rs 15.89 crore) in the third quarter .

Aggregate deposits grew by 18.10 per cent to Rs 17,829.86 crore (Rs 15,096 crore) while net advances increased by 25.15 per cent to Rs 9,710.03 crore (Rs 7,758.82 crore). "The bank has also received substantial deposits from the Life Insurance Corporation", Corporation Bank chairman and managing director, K Cherian Varghese, said.

He also mentioned that, in a bid to increase loan disbursal, thrust has been accorded to the housing finance sector where delinquency level is fairly low. However, the bank has taken a cautious approach in the core retail area as risk is high. Most of the loan advances were at below prime lending level. That leads to, as Mr Varghese pointed out: "growth in interest income is not in line with the growth in loan-books".

The board of the bank, which met on Wednesday, also approved a new scheme -- Corp Kar Suvidha -- for individual tax payers. Under the scheme loans of up to Rs 50,000 would be available to be repaid in 10 months. The interest rate is pegged at 11.5 per cent. The bank was also in the process of launching Internet-banking.

The bank has managed to reduce its cost of deposits to 7.7 per cent as against 8.1 per cent as on end-December 2000. Yield on investments dropped to 11.40 per cent from 11.80 per cent, as interest rates have been moving southwards. Aggregate investments was at Rs 7,662.29 crore as on end-December 2001. The net worth grew around 51 per cent to Rs 2,060 crore. EPS has improved to Rs 24.42 as on end-December 2001, from Rs 21.82 as on end-March 2001. Meanwhile, ICICI has offered its assets to Corporation Bank. "We are examining the assets and will acquire good assets from the institution," said a senior Corporation Bank officer.

...sets up committee for VRS option
Our Banking Bureau

Mumbai, January 23: Corporation Bank is examining the possibility of offering a voluntary retirement scheme (VRS) to its employees, the bank’s CMD K Cherian Varghese said on Wednesday.

...spots 139 branches to sell LIC products
Our Banking Bureau
Mumbai, Jan 23: Corporation bank has identified 139 branches for selling the products of Life Insurance Corporation (LIC).
LIC holds 27 per cent in Corporataion Bank to utilise the the bank’s infrastructure for its multi-operation.
The bank is waiting the guidelines of the Insurance Regulatory Development Authority (Irda) to sell the products of LIC and New India Assurance. A few officials of the bank have been trained to undertake selling of insurance products.
The bank has set up a committee comprising its general managers to restructure the bank, including its human resources.

"If the committee finds any surplus staff, then the issue will be placed before the bank’s board and subsequently, before the government of India," Mr Varghese said.

Corporation Bank is the only public sector bank which has not come out with a voluntary retirement scheme (VRS).

This proposal to offer VRS assumes importance especially as the Corporation Bank Officers’ Organisation (CBOO) has threatened to go on strike ove the bank management’s failure to introduce a voluntary retirement scheme (VRS).

The bank did not offer VRS as it is planning to broadbase its operations.

"We are planning to expand our operations and has decided to set up 250 ATMs in the current year.

It also has plans to open 100 extension counters, 100 ATMs and 25 branches in the premises of the Life Insurance Company (LIC) during the next year according to the terms of the memorandum of understanding (MoU) signed with the LIC.

Corporation Bank has also decided to invest Rs 150 crore towards upgradation of technology.

"These require a lot of manpower and we are planning to recruit 125 officers and 160 clerical staff very soon," Mr Varghese said.