Improved performance by BOBL
Our Banking Bureau
30 April 2004

Chennai: In line with other private banks, the city based Bharat Overseas Bank Limited (BOBL) has decided to focus on the retail sector in a major way. The bank has declared the current fiscal as the `Year of Retail Banking’.

Apart from introducing products targeting the retail sector, BOBL is also on a major branch expansion spree.

According to chairman & ceo G Krishna Murthy, the bank will be opening
branches at Jaipur, Indore, Kukatpally (Hyderabad), Kakinada, Erode (second branch), Kottayam and extension counters in Rohini and Indira Nagar (Lucknow).

Last fiscal the bank opened branches at Surat, Barasat, Chromepet, K.K. Nagar (Madurai) and Palakkad thereby taking the total number of branches to 85 branches.

The staid bank is now transforming itself into an integrated financial service provider offering varied para banking services like selling life and non life insurance policies, distributing credit cards and acting as sub agents for Western Union Money Transfer. The bank is also in the process of tying up with Stock Holding Corporation of India Limited to facilitate demat services at various branches

Meanwhile BOBL for the year ended March 31, 2004 has achieved a net profit of Rs. 35.08 crore as against the previous year figure of Rs. 28.52 crore.

“The net owned funds increased to Rs. 172 crore as on 31.03.2004 from Rs 140 crore as on 31.03.2003,” Murthy said.

For the first time in the bank’s history, the book value per share touched a four digit value of Rs.1,093.

According to Murthy the total business (deposits and advances) transacted by the bank last fiscal registered a 17 per cent growth to Rs.3,900 crore. “The total deposits stands at Rs.2,472 crore and the gross advances at Rs.1,428 crore. Our credit: deposit ratio is a healthy 58 per cent.”

While the cost of deposits went down to 4.92 per cent, BOBL’s net interest income increased to Rs. 85.33 crore from the previous year figure of Rs. 60.54 crore. The interest spread increased to 3.47 per cent from 2.72 per cent in 2002-03. The yield on advances however went down to 8.54 per cent last fiscal from 9.44 per cent during 2002-03.

With its focus on containing the non performing assets (NPA) BOBL has brought down its net NPA to 2.26 per cent of the advances from 3.31 per cent as on March 31, 2003.

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