Corporation Bank proved among the biggest gainers among bankiing stocks in the last week, touching its new 52-week high of Rs 165 on May 9.
In nine sessions between April 25 and May 9 2003, the scrip of Corporation Bank rose 17.4 per cent to Rs 164.55 from Rs 140.15. In fact, the scrip of state-run bank has risen 69 per cent from its 52-week low of Rs 97.25 on 25 October 2002.
Corporation Bank is rallying on talk that Life Insurance Corporation will hike its stake in the bank. Already, LIC, till 31 March 2003, holds a 2.7 per cent stake in the company. In addition, there are expectations that the company will turn out impressive results on 14 May 2003.
Analysts expect the bank to record a net profit of Rs 70-100 crore (Rs 700 million-Rs 1 billion), up 54-120 per cent, on an increase in net total income of 23-43 per cent to Rs 300-350 crore (Rs 3-3.5 billion).
Earlier, the Mangalore-based commercial bank doubled its housing finance portfolio from Rs 631 crore (Rs 6.31 billion) last year to Rs 1,400 crore (Rs 14 billion) till December this fiscal.
The bank, which started selling insurance policies of the Life Insurance Corporation of India three months back, expects to earn a premium income of Rs 2 crore (Rs 20 million) in the next fiscal.
The bank has now decided to open 33 more service outlets on the premises of LIC as part of its strategic alliance with LIC. Earlier, it trained about 63 of its officers as part of its insurance distribution plans.
Corporation Bank has recently gotten into a spate of tie-ups in a bid to push up business. It signed an agreement with Union Bank of India to share its cash management services infrastructure. In addition, the Mangalore-based bank and the Kolkata-based Allahabad Bank signed an agreement recently for sharing their ATM networks across the country.
Corporation Bank has 317 online interconnected ATMs and plans to take this up to 500 by end-March 2003. Among public sector banks, it has the second largest network of online interconnected ATMs.
Corporation Bank already has ATM sharing pacts with Oriental Bank of Commerce, Karnataka Bank and Bank of Rajasthan. It also proposes ATM sharing with Dena Bank.
Meanwhile, Corporation Bank has sent around 23 notices in a bid to recover non-performing assets worth Rs 30 crore. The bank plans to issue further notices to around 100 defaulters for at least Rs 100 crore in dues.
Mangalore-based Corporation Bank has a total of 730 branches and 65 extension counters spread across the country.
For the third quarter ended 31 December 2002, Corporation Bank recorded a 66 per cent jump in net profit to Rs 151.81 crore (Rs 1.51 billion) compared a to a net profit of Rs 91.45 crore in the corresponding period in the previous year. Net total income increased 47 per cent to Rs 389.71 crore (Rs 3.90 billion) from Rs 265.13 crore (Rs 2.65 billion) in DQ 2001.
As on 31 March 2003, the government holding in Corporation Bank was 57.17 per cent, while institutions and the public held 37.98 per cent and 4.85 per cent respectively.