Andhra Bank eyes insurance partner

Hyderabad-based Andhra Bank was scouting for strategic partners to foray in life insurance sector by the end of the financial year 2007-08, said K Ramakrishnan, chairman and manging director Andhra Bank on the sidelines of annual Ficci Banking Conclave on Thursady.

Ramakrishnan said the bank intended to hold at least 26 per cent stake in joint venture company, and Bank of Baroda was one of the potential partners for the project. He further said the bank was keen to enter general insurance sector in partnership with other banks in the near future.

“Currently the insurance venture is in a nascent stage and we are yet to decide on the partners,” he said, adding, “we have a strong synergy with the Bank of Baroda.” This apart, the bank plans to open representative offices Saudi Arabia, Oman, Kuwait and Qatar by the end 2007-08.

“We are looking for a presence in the Middle East to tap a few million expatriates from Andhra Pradesh,” he said.

The bank plans to open its second overseas office in New Jersey after the necessary approvals from the US government.

Currently, the bank has one foreign office in Dubai, and is looking for a presence in Malaysia in alliance with with the Bank of Baroda and Punjab National Bank.

Domestically, the bank plans to open 85 new branches and 200 ATMs this year across the country. Nearly 50 per cent of the branches would be in rural areas, said Ramakrishnan. At present, the bank has 1,303 branches in the country, with nearly 900 in Andhra Pradesh.

With the current business of around Rs 70,000 crore, the bank plans to reach the 1 lakh crore mark by the end of 2009. Also, this fiscal the bank is looking at 25 per cent and 23 per cent increase in credit and deposit respectively.

The bank has identified education and housing as priority lending sectors, and plans to decrease the lending rates in the two sectors by 25 basis points across segments in the coming months. Last year the bank disbursed Rs 1,000 crore as education loan, and Rs 3,900 crore as housing loan.

With the headroom of around Rs 3,000 crore, the bank plans to raise Rs 400 crore in the tier II category by December 2007.

Source: Business Standard