Dhanlaxmi to rationalise staff strength,not shut down branch

He also dispelled fears of merger with any other bank saying that there is no such possibility.

The employee strength of the bank has anyway come down to 4,200 from 4,600 since November 2011.

“Most of the people had quit voluntarily in this period. We are evaluating the optimum staff strength to run the bank and will optimise it according to the requirement,” he said without giving any specifics on this matter.

The Thrissur-headquartered bank was in the news recently owing to tussle between the union and the management even as the bank faced liquidity pressure in the wake of rapid expansion undertaken.

“Due to expansion of the bank,there were some kind of pressure on profitability as revenue growth was not in line with the capital and operational expenditure incurred by the bank. Also,reliance on corporate business had put strain on margin in the short-term. So,we have changed our track and started focusing on retail business,” Jayakumar said.

The Bank would like to increase the share of retail business to 50 percent in the current fiscal against 40 percent now,he added.

Referring to profitability,he said the bank is likely to be profitable in the current financial year.

“We plan to grow our gold loan business to 20-25 percent in this fiscal from the present eight percent,and overall business growth of 20-25 percent during this period,” he said.

The bank is aiming to increase the net interest margin to 2.5-3 percent in FY13 from around 2 percent as of now and is also planning to ramp up its current account,savings account (CASA)ratio.

“From the present 18 percent of CASA,we want to increase it to 23 percent in the current financial year,” Jayakumar said adding that it will also focus on increasing its fee-based income to boost profitability.

“We have a tie-up with Bajaj Allianz for both life and general insurance segment,which will be our major area of focus for increasing non-interest income,” he said.

The bank will also soon raise both debt and equity capital to support its future business growth.

“While we plan to raise around Rs 200 crore of Tier-II capital in the first quarter of FY13,we will raise Rs 200 crore of Tier-I capital in the second quarter of this fiscal,” he said.

Post-capital infusion,our capital adequacy ratio will be in the range of 11-12 percent from present 9.88 percent,he added.

Jayakumar also said that management’s relationship with the union is cordial and everything is being done taking union into confidence.