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NPA recovery on target, says IOB

Our Bureau

BANGALORE, Sept. 18

INDIAN Overseas Bank is confident that its non-performing assets (NPA) recovery is on target and it will end the current financial year with an operating profit of Rs 250 crore.

The bank's Executive Director, Mr S. C. Gupta, tried to underplay the bank's NPA problem though the Union Minister of State for Finance (Banking and Insurance), Mr Balasaheb Vikhe Patil, has reportedly expressed concern over the bank's growing NPAs.

``The Minister was making a general statement regarding the NPA situation in the banking industry and it has been mis-understood and related to IOB,'' said Mr Gupta during a press conference here.

While IOB's NPA position was alarming with a gross NPA of 13.18 per cent and a net NPA of 7.65 per cent (as of March 31, 2000), the bank was confident of improving its recovery in the coming years. ``This year we have targeted to bring down NPAs by Rs 20 0 crore and we have been on target in the last five months,'' Mr Gupta added.

IOB, which was offering its shares at par to the public to augment its capital adequacy ratio, was also enhancing its product range. The bank has decided to distribute insurance products and was in talks with a couple of insurance majors to finalise a di stribution tie-up. The focus would be on the southern markets, where IOB has a strong branch network.

Premium issues!

THE stock market investors have not found bank scrips to be really ``hot'' counters. But, that has not stopped the banks from calling themselves ``premium'' candidates!

During their public issues, banks, especially the public sector ones, make it a point to talk of their generosity. ``We could have charged a small premium on our shares but we wanted a larger section of the investing community to take part in the public issue,'' is what you generally hear from bankers.

If their attention is drawn to the performance of some of the bank scrips in the secondary market, it is ignored and the response is once again the same. ``Fundamentally, our bank is very strong. Due to the poor market conditions, all the scrips are doin g badly now.''

But, the Union Government does not seem to think so. This parent is in a hurry to divest its stake in most banks!