Tuesday, March 23, 2004
Following the central government notification permitting 74 per cent foreign investment in Indian banks, the Aga Khan Fund for Economic Development (AKFED) — which is the single largest shareholder with 49 per cent stake in Development Credit bank — is likely to increase its stake further by investing up to $10 million. Yogesh Chaddha, chief financial officer of the bank, said DCB has plans to shore up its core capital.
The bank has already raised capital by offering rights to the existing shareholders. “In addition to this we have also invited bids from private equity firms,” he said. He declined to quantify how much more stake AKFED is likely to pick up in the bank.
The bank’s capital adequacy ratio as on September 30, 2003, stood at 11.29 per cent. Following the capital infusion, DCB plans to increase the size of its retail portfolio.
The bank’s head of personal finance services, Sandeep Mookerjee, said DCB’s prime focus in the next fiscal will be launch of international debit card, internet banking facility and mortgage-based products.
These products are likely to hit the market in April, he added. The bank has tied up with Visa International accepted debit card programe.
Mookerjee added that the bank has no plans to enter commercial vehicle financing as the vehicle loans market is saturated and the yields have shirk sharply.
He said DCB plans to increase its presence in the retail asset book to 40 per cent over a timeframe of three years.
Currently, it contributes about 10 per cent of the total asset base. In the next fiscal the bank aims at roping in 25,000 new customers every month as against 10,000 at present.
DCB in synergy with its principle shareholder AKFED will extend its non resident (NRI) banking products in Central Africa — Kenya, Tanzania and Uganda, said Mookerjee.
The bank has 67 branches spread across nine states and two union territories.
DCB is also in the process of expanding its ATM networks to 100 by March 31 from the current 70. The bank plans to add on another 100 ATM centres by March 2005.
For the half-year ended September 2003, the deposit base of the bank stood at Rs 3,661 crore and advances stood at Rs 2,252 crore. The total income was Rs 224 crore and expenses were Rs 207 crore. The profit for the half-year ended September 2003 was Rs 17 crore