Axis Bank to dig into Sri Lanka’s post-war infrastructure pie

Monday, 24 October 2011 00:00 - - {{hitsCtrl.values.hits}}

Reuters: India’s No.3 private lender Axis Bank will focus on lending related to Sri Lanka’s post-war infrastructure drive instead of competing for retail banking, the bank’s Country Head said on Friday after opening its first Sri Lankan branch.

Axis Bank, the fifth Indian bank licensed to operate in Sri Lanka, started operations in the commercial capital Colombo on Friday.

It plans to focus on loans for power projects, roads and ports, with some lending for small and medium enterprises, agriculture. It will do some retail banking as well.

“We might be able to assist in terms of syndication which is the business line we have excelled in India, raising money for large infrastructure projects and things like that,” Axis Bank’s CEO of Local Operations Ashok Basu told Reuters over the phone.

Basu also said that bank had no immediate plans to expand the branch network, but may look at investment banking later.

Sri Lanka is now enjoying a third year of peace after defeating the separatist Tamil Tiger rebels and is experiencing a growth in demand for banking services amid economic growth forecast to hit a record 8.3 per cent this year.

The nation has embarked on a $ 6 billion plan to renovate and upgrade infrastructure across the nation, borrowing heavily to capitalise on the $ 50 billion economy’s opportunities after the end of the war.

On Thursday, the Cabinet approved a $ 55.4 million loan from a UK unit of HSBC Holdings PLC and State-owned People’s Bank to construct 210 rural bridges.

Axis Bank posted a net profit growth of 27 per cent to 9.4 billion Indian rupees ($ 191.2 million) in the June quarter. It was due to release earnings on Saturday.