Vijaya Bank gets back to organic growth

BANGALORE: With mergers and acquisitions failing to come through, Vijaya Bank has decided to focus on organic growth. The bank plans to aggressively expand its branch network in the coming year.
"In the changed (banking) environment, we have decided to focus on branch expansion and already have licenses for 40 branches", said bank chairman and managing director, M S Kapur.The bank had earlier opted for an inorganic growth and had even short-listed a couple of banks based, in the northern region, to expand its business.
Besides branch expansion, Vijaya Bank is also expanding its reach in the international market and is planning to set up representative offices in the Middle East, Shanghai and Hong Kong. Kapur said the business needs of Vijaya Bank''s customers has made the bank look at these markets.
Referring to the bank''s current year prospects, he said, retail would continue to be the focus area. "The net increase in credit was Rs 3,000 crore in 2003-04 out of which Rs 2,000 crore came from retail lending'' he added. While other sectors like agriculture and manufacturing are expected to improve the credit off-take during the current year, Vijaya Bank is keen on maintaining its aggression on the retail front.
The share of retail advances at present stands at around 30 per cent and the bank is keen on increasing it to a level of 50 per cent. Kapur believes that a larger retail portfolio minimises the credit risk for a bank.
Vijaya Bank''s recent push on retail products like home loans and personal loans, has helped it to expand the customer base to over five lakh individuals. The bank is hoping that a large retail base would also enable it to sell other products like insurance and mutual funds. The bank has a tie up with the US-based Principal group for the distribution of the later''s mutual fund products.