Syndicate Bank is contemplating a rights issue or Tier 1 bonds by the end of the last quarter of the current fiscal, said its CEO Mrutyunjaya Mahapatra.
While reiterating that the bank is not under capital pressure and can afford to wait till market sentiments improve (as all PSB bank stocks are under pressure) he said, “Our CAR is 12 per cent. We are looking for growth capital. The issue size could be ₹500-1,000 crore,” he added. The bank, meanwhile, is proposing to raise ₹400-500 crore through the employee share purchase scheme.
Mahapatra, who took over reigns of the bank three months ago, was in the city at a town hall meeting of his workforce
Briefing reporters on the sidelines of this meet, he said, “We plan to give shares to our employees at a 20-25 per cent discount. Good performers will get a little more discount.”
He conceded that the first half of the current fiscal was not quite good. “We have degrown, as it was three continuous quarters of losses due to provisioning requirement. We were seeing some bottoming out of corporate NPAs, but because of farm loan waiver, we had to provide for agri-NPA during the third quarter,” he said.
The bank is in the process of creating a robust recovery vertical to focus on large NPA accounts. “We want to derisk our balance sheet,” he added. To a query he said, “We have a strong young workforce. We want to motivate them, use technology and digitisation extensively, control leaders from the front, increase our retail, agri and MSME portfolio and anything that would increase the value of the bank.”
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