Bharat Overseas Bank to share private bank''s ATM network

The advantage being, the bank could offer its customers access to ATMs (for a fee, of course) at a lower capex. Not disclosing the name of the large private bank (what is only known is that it has a nationwide ATM network) BOBL chairman G Krishna Murthy says: "We expect to sign the agreement soon."

According to him BOBL will set up its own ATMs in 10 cities this fiscal. Last year, it installed ATMs in three metros — Chennai, Delhi and Mumbai. The 80-branch bank is also in the process of expanding its branch network by opening 15 more this year. "Ultimately we would like to have 120 branches in a couple of year''s time," says Murthy.

The bank closed last fiscal with a net profit of Rs 28.52 crore, up by Rs 5.77 crore compared to the 2001-02 figures. The total income last fiscal was Rs 212 crore (interest income: Rs 175 crore; other income: Rs 35 crore) as compared to the Rs 216 crore (interest income: Rs 167 crore; other income: Rs 49 crore) posted the previous year.

"The fall in income from treasury operations resulted in the total income going down last year," reasons Murthy. Last year BOBL''s cost of deposit and yield on advances went down to 5.87 and 9.44 per cent, respectively, as compared to the 2001-02 figures of 6.77 and 10.29 per cent.

But the interest spread showed a marginal increase to 2.72 per cent for the year ending 31 March 2003. According to Murthy, BOBL logged a total business Rs 3,088 crore (deposits: Rs 1,823.26 crore; advances Rs 1,193.08 crore). Compared to the previous year, the deposits showed an increase of 18 per cent and the advances 27 per cent.

The credit-deposit ratio stood at 55.52 per cent. Speaking about BOBL''s non-performing assets (NPA) Murthy says the net NPA went down to 3.31 per cent as on 31 March 2003 from 4.38 per cent of the previous year.