The Hindu Business Line : Bank of Baroda plans to raise Rs 3,000 cr

Mumbai, Oct. 31 Bank of Baroda is planning to raise about Rs 2,500-3,000 crore by January to meet capital requirements under Basel II norms and for further growth in business.

The bank is yet to decide on whether the capital would be tier-I or tier- II, said Dr A.K. Khandelwal, Chairman and Managing Director. It could be either debt or hybrid capital, he said.

The bank, which declared its results on Wednesday, recorded a modest growth of 13.5 per cent in net profit at Rs 327 crore for the quarter ended September 30, against Rs 288 crore for the same period last year. The growth came from rise in net interest income and a robust growth in other income.

While net interest income grew by 10 per cent to Rs 982 crore (Rs 890 crore), other income grew to Rs 454 crore (Rs 322 crore), a growth of 41 per cent.

Under other income, the bank saw treasury income rise to Rs 126 crore (Rs 70 crore) and income from written off assets rise to Rs 76 crore (Rs 49 crore).

The bank’s total expenses increased by 42 per cent to touch Rs 2,697 crore (Rs 1,892 crore). Dr Khandelwal said: “We have provided Rs 100 crore towards transitional liability under AS 15 for employees’ pension and also provided for tax. We have made a total provision of Rs 152 crore. Additional liability for the bank under AS15 would be approximately Rs 900 crore and we have already provided one tenth of that.”

The bank saw its cost of deposits increase to 5.51 per cent as on September 30, from 4.43 per cent, due to higher interest rates on term deposits.

Yield on advances increased from 8.12 to 9.61 per cent.

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