UPDATE 1-Allahabad Bk eyes 20 pct loan, 17 pct deposit growth

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KOLKATA, Oct 3 (Reuters) - State-run Allahabad Bank (ALBK.BO: Quote, Profile, Research) is aiming for loan growth of 20 percent and deposit growth of 17 percent in the year ending March 2009, a top official said.

The bank also hopes to maintain a net interest margin of 2.75 percent and a capital adequacy ratio of 11 percent during the same period, Chairman and Managing Director, K.R. Kamath told a news conference of Friday.

"The loan growth will come from small and medium businesses, steel, cement and commercial real estate sectors," Kamath, who recently took over as chief of the Kolkata-based bank, said.

Its capital adequacy ratio stands at about 11.68 percent now, he added.

The bank has headroom to raise 25 billion rupees in the tier I and tier II segment, the chairman said adding it has no immediate plans to raise funds for growth.

"We will raise funds at the opportune time."

The federal government owns about 55 percent in the bank. "We are not keen in diluting government stake to raise funds," the chairman said.

It also hopes to restrict growth of high cost deposits at 190 billion rupees to maintain margins.