Dhanlaxmi Bank plans to shut 30 branches, appoint deputy CEO
Dhanlaxmi Bank is planning to shut 30 branches in key metros, including Mumbai and Delhi, and it may elevate a key official to the post of deputy chief executive officer.
MUMBAI: The Thrissur-based Dhanlaxmi Bank is planning to shut 30 branches in key metros, including Mumbai and Delhi, and it may elevate a key official to the post of deputy chief executive officer.
The bank's network covers 275 branches and 401 ATMs over 140 centers in 14 states.
The downsizing is a part of the revival plan submitted by PG Jayakumar, MD and CEO, to the bank's board on March 28. Some of the branches operate in high-cost areas and the bank does not want to keep them open. "The bank is also planning to shut its corporate banking unit,'' said an official with knowledge of the developments.
Muralidaran Rajamani, the bank's chief operating officer, is likely to be made the deputy chief executive officer.
"For everything, there is a process. It is not yet been formalised and Rajamani is the senior most executive after me (Jayakumar),'' Jayakumar said.
The 84-year old Thrissur-based community lender has been attempting to cut costs and improve profits after its CEO Amitabh Chaturvedi quit some weeks ago. The new MD & CEO, PG Jayakumar, is trying to revive the bank whose cost structure has become bloated due to frenetic expansion in the past few years.
The bank posted a loss of Rs 36.46 crore in the quarter ended December 2011 as against a profit of Rs 7.26 crore in the corresponding period last year. The bank's expenses rose by 41.74% to Rs 126.55 crore in the December quarter.
The net non-performing assets of the bank stood at 0.35%. The bank's capital adequacy ratio has dipped to 9.88% from 13.39% in December 2010.
"The bank is expected to sack about 800 executives to cut cost. The bank's balance sheet has shrunk by Rs 1,500 crore in the past two months. It is facing liquidity pressure. The new business plan is expected to focus on growing the retail and SMEs,'' said another official privy to the plans.