Dubai: Canara Bank, the third largest bank in India in terms of domestic operations, has plans to open branches and representative offices across key Gulf cities in the near future, the Bank's chairman and managing director, A.C Mahajan, told Gulf News.
The bank opened its first regional representative office in the UAE last week. The representative office, located in Sharjah, is part of our efforts to reach out to our customers where ever they are. Currently the banking licences are restricted in the UAE and the next best option is a representative office," he said.
Although the bank has no immediate plan to open an international branch in the Dubai International Financial Centre (DIFC), the bank is keen on having a presence in Dubai, Abu Dhabi other major Gulf cities such as Bahrain, Doha and Muscat.
"We have applied for a branch licence in Bahrain. The bank is also working with Qatar Financial Centre (QFC) and authorities in Oman to obtain branch licences there. In the UAE we have no immediate plan to start lending operations. However, DIFC is a good opportunity to do so when we decide on that," he said.
Bangalore headquartered Canara Bank is majority (73 per cent) owned by the government of India and has major presence in South Indian states of Karnataka, Andhra Pradesh, Tamil Nadu and Kerala. Going forward, the bank is targeting northern and western India a to expand. "We are more of a conventional commercial bank and the brick and mortar model is very important for our growth across the country. We are planning to open 200 branches in the current year. These branches will be opened across the country with special focus on increasing our presence in Gujarat, Rajasthan and the northeastern states," said Mahajan.
The present network of the bank comprises 3,050 branches and 2,017 ATMs. As part of the expansion the bank is planning to recruit nearly 2,000 new personnel during the current financial year.
More branches
Banks in India are once again in expansion mode and are opening more branches. The most visible examples of this expansion binge are the industry's top two players — State Bank of India and ICICI Bank. State Bank of India opened about 1,100 branches last year while ICICI followed with the addition of 580 branches during the last 13 months. Other top players such as HDFC Bank added 313 branches while Axis Bank added 200 branches.
Canara Bank expects more than 25 per cent loan growth this year although interest rates are likely to go up. "The interest rates are clearly inclined upwards. But the loan demand driven by underlying economic growth in the country is expected to see loan growth in the range of 25 to 30 per cent," said Mahajan.
The bank reported a 45.8 per cent jump in its net profit at Rs30.21 billion (Dh2.45 billion) for 2009-10. In the fourth quarter (January-March 2010), the Bangalore-headquartered bank saw a 30 per cent dip in net profit on the back of lesser trading profit and higher provisions. During 2009-10, the bank made a total provision of Rs20.39 billion (Dh1.65 billion).
