The Hindu Business Line : Corporation Bank may go in for Tier-II capital

New Delhi, July 16 Corporation Bank has ruled out any follow-on equity offering this fiscal even as it may look at raising Tier-II capital to fund business growth.

“We have no plans to raise any equity (under Tier-I capital) this fiscal. Our capital adequacy as on June 30, 2007 is at a comfortable level of 13.3 per cent. We may look at Tier-II capital as there is enough headroom,” Mr B. Sambamurthy, Chairman and Managing Director, told Business Line.

Basel-II norms

On whether the current capital would be adequate for meeting the Basel-II norms, Mr Sambamurthy said that the capital adequacy would be at about 10.5 per cent even after the implementation of Basel-II norms. Corporation Bank is required to conform to Basel-II norms only by March 2009 as it does not have any foreign branches.

Meanwhile, Mr Sambamurthy said that the bank wants to grow the share of low cost current account and savings account (CASA) deposits in total deposits to 40 per cent by 2010 from the current level of about 30 per cent.

Branch expansion

To this end, it wants to ramp up its branch network across the country. “We will add about 80 new branches this fiscal to take the overall number to 1,000 branches. Our aim is to have 1,000 branches and 1,000 ATMs,” he said.

Corporation Bank is also doing a rethink on its earlier strategy of adding more ATMs and going slow on branch expansion. “We have realised that there is no substitute for brick-and-mortar and so there would be more focus now on adding branches than ATMs,” he said.