Vijaya Bank is keen on acquiring a north-based bank to enhance its presence and network in the region, according to chairman and managing director M S Kapur.

Talking to Business Standard on Saturday, he said some banks have expressed intentions of getting merged with Vijaya Bank. A decision on acquisition was expected shortly, he said.

"We are keen on acquiring a north-based bank to augment our business in the northern part of the country where we are not adequately present," he said.

He added that the bank is open to acquiring either a commercial bank or a co-operative bank to expand its network in the region to grab a sizeable portion of the market.

Sources close to the development said the bank had entered into dialogues with a couple of banks.

"We will announce the development as and when it happens," Kapur explained, when asked about the status of the acquisition.

Vijaya Bank has targeted a total business of Rs 43,000 crore (Rs 430 billion) by 2005, the volume this fiscal is expected to be close to Rs 35,000 crore (Rs 3,500 billion).

"Retail along with home loan is expected to provide a boost to its business volumes and we hope that as much as 50 per cent of our business volumes will be from retail lending, which at present is close to 34 per cent," Kapur said.

The bank is also in the process of merging its home finance subsidiary, Vijaya Home Finance with itself.

The merger will enhance the company's home loan portfolio by Rs 300 crore (Rs 3 billion) which is close to Rs 600 crore (Rs 6 billion) now.

The merger will also enhance the bank's capital base by Rs 50 crore (Rs 500 million) thus allowing it more room for raising Tier-II capital.

The bank's capital base stands at Rs 433 crore (Rs 4.33 billion) at present. Although Kapur ruled out the possibility of raising Tier-II capital from the market this fiscal, he said, "We intend to raise around Rs 100 crore (Rs 1 billion) next year when our business volume increases."

Kapur said, "We intend to add some 65 new branches to our network in the next couple of years. Our bank has around 851 branches now."

On connectivity he said that Vijaya Bank has initiated a Rs 100 crore (Rs 1 billion) core banking solution project, which was awarded to Infosys and Wipro.

The idea is to initially connect 18 branch offices as a pilot project, which would be followed by connecting 368 branches in the first phase.

"We hope to complete the phase I connectivity project by September 2004 following which we intend to install 100 fully on-line ATMs."