Allahabad Bank eyes stake in African bank

Allahabad Bank eyes stake in African bank

Kolkata: State-run Allahabad Bank plans to buy stake in a small bank in Africa to establish presence in the growing market, a top executive of the lender said on Monday.

The bank would like to invest $15-20 million (Rs59.4 -79.2 crore) at the upper limit to buy about 74% stake in a bank in Africa, chairman A.C. Mahajan said over telephone.

“We will shortly appoint merchant bankers to find the possible target," he said. “The African economy is growing and we want to tap the potential there."

In addition to its operations in India, the bank has offices in Hong Kong and Shangem (China).

Allahabad Bank has no plans to raise further capital in the year to March 2008, Mahajan said.

The Kolkata-based bank, with a capital adequacy ratio of 13%, recently raised Rs500 crore through debts, Mahajan added. The bank expects to maintain net interest margin at 3% in the year to March 2008 on current level of interest rates, he added.

Allahabad Bank expects interest rates to remain stable for the rest of the fiscal year, he said.

The bank’s shares were up 0.86% and closed the day at Rs112 in a firm Mumbai market. REUTERS