Financial Daily from THE HINDU group of publications
Tuesday, Dec 06, 2005
Financial Daily from THE HINDU group of publications Tuesday, Dec 06, 2005 |
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Money & Banking
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Public Sector Banks Capital restructuring must for growth: Indian Bank chief Our Bureau
Kochi , Dec. 5 BANKING on a 15-per cent growth in business volumes this year, Indian Bank is targeting a 30-per cent growth in profits. But this profit trajectory could not be sustained in the long run, unless the capital base of the bank were restructured, Mr K.C. Chakrabarty, Chairman and Managing Director of the bank, pointed out. Addressing a press conference, he said that the growth in profits could come down to 25 - 20 per cent levels in future, in the absence of restructuring. The bank has requested the Finance Ministry to restructure its capital base by wiping off its accumulated losses of around Rs 3,830 crore against its capital of Rs 4,594 crore. By ploughing back its profits and shoring up its reserves, the bank can still remain comfortable with a capital adequacy norm of around 11 per cent even under Basel II norms in the immediate future. However, Mr Chakrabarty hoped that the capital restructuring would take place at the earliest, in order to accelerate incremental growth in credit, thereby shoring up its profitability. Post-restructuring, the bank could also look at other avenues to shore up its capital base such as tapping the capital markets.
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