Financial Daily from THE HINDU group of publications
Tuesday, Jun 22, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jun 22, 2004 |
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Money & Banking
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Public Sector Banks Indian Bank to raise Rs 300-cr tier-II capital — IPO ruled out for now Our Bureau
Mr. M.B.N. Rao, Chairman and Managing Director, Indian Bank looking at the papers, prior to the press conference in Hyderabad on Monday. - - A Roy Chowdhury
Hyderabad , June 21 HAVING recorded a turnaround through three years of intense restructuring programme, Indian Bank has decided to augment its capital to risk assets ratio (CRAR). It will issue subordinated bonds under tier-II capital for raising Rs 300 crore including a green shoe option of Rs 100-crore. Announcing this at a press conference here on Monday, the bank Chairman and Managing Director, Mr M.B.N. Rao, said though the bank was comfortable with the existing capital adequacy ratio of 12.82 per cent, the tier-II issue was planned with an anticipation of substantial growth in business volumes. The bank, which posted a business volume of around Rs 45,000 crore during last fiscal, targets a balance sheet size of Rs 55,000 crore for the current fiscal. According to Mr Rao, the bank is confident of touching the Rs 1-lakh-crore mark in business volumes by 2007. The tier-II bonds issue, the first one from Indian Bank, consists of two tranches of 84 months with a coupon rate of 6.15 per cent and 120 months with a rate of 6.25 per cent. The issue opens on June 23 and closes on July 7 or earlier in case of full subscription. Following this, the capital adequacy ratio would improve to around 14 per cent, Mr Rao said. Ruling out an initial public offer (IPO), Mr Rao said the bank expects to achieve strong capital adequacy ratio through significant internal accruals on growing business volumes consistently. Having recovered non-performing assets (NPAs) of Rs 425 crore during the last fiscal, which brought down the net NPAs to 2.71 per cent (Rs 383 crore) from 6.15 per cent in the previous fiscal, the bank has set ambitious targets to attain nil net NPAs by 2007. With a network of 104 automated teller machines (ATMs) across the country, the bank proposes to install 150 more during the current fiscal. Apart from tie-ups with two institutions for sharing ATMs, Indian Bank is in talks with three banks to enable its customers have access to over 5,000 ATMs, Mr M.B.N. Rao said.
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