IOB to form NBFC to offer capital mkt services

The public sector Indian Overseas Bank ( IOB), which is set to kick off its platinum jubilee celebrations on February 10, is planning to soon form a non-banking finance company (NBFC) for offering wealth management and capital market services.

The bank has also chalked out plans for raising $ 1 billion ( about Rs 4,550 crore) to bolster its overseas operations.

"We will form a financial services company to offer wealth management services and capital market advisory services, which have the potential to increase fee income for the bank, besides enabling us to offer these services to our customers," said M. Narendra, chairman and managing director ( CMD) of IOB, while announcing the results for the quarter ended December 2010.

IOB reported a 10.13 per cent rise in net profit at Rs 638 crore for the quarter ended December 2010.

Sensing the growing demand for gold loans, the Chennai- headquartered bank is also planning to offer gold loans in a big way through specialised branches.

"We are planning to raise $ 1 billion by July 2011 through dollar- denominated medium- term loans. We will complete the first tranche of raising $ 500 million before March- end," Narendra said. " These funds will be used for financing Indian corporates operating abroad in the form of foreign currency loans," the CMD added.

The bank has six overseas branches located in Singapore, Hong Kong, Seoul ( South Korea), Bangkok ( Thailand) and Colombo ( Sri Lanka) and two remittance centres in Singapore. The bank's representative offices are located in Colombo, Dubai, China and Vietnam. It is planning to convert its representative office in China into a full- fledged branch soon.

In a joint venture (JV) with Bank of Baroda (BoB) and Andhra Bank, IOB is setting up a bank in Malaysia.

IOB is also set to form a JV with an IT firm for offering technology services to smaller banks, including co- operative banks in the country.

Courtsey: Mail Today