Bank of Maharashtra (BOM) plans to mobilise up to ₹ 1,000 crore through Basel-III compliant bonds (additional Tier-1 capital) this month end or sometime in mid-January next year, R.K.Gupta, Executive Director of this bank, has said.
This will be in addition to the capital request of about ₹ 400-500 crore already made with the Finance Ministry and likely to form part of the ₹ 11,200 crore capital to be allocated to various banks.
“The market is good for additional Tier-I bonds (Basel-III compliant bonds). This is because return will be better than other instruments. The Basel-III compliant bonds will have some features of equity”, Gupta told Business Line here.
Gupta also indicated that this public sector bank may tap the market with a follow-on public offering sometime in the first or second quarter next fiscal.
BOM will now aspire for “profitable” business growth and will strive to better its bottomline’s performance this fiscal when compared to last year. .
“Despite high NPA levels, we want to surpass profits of last year”, Gupta said.
In a change of tack, BOM has decided to go on an expansion mode and this fiscal would look to ramp up credit to retail and small and medium enterprises, Gupta said..
For the last one year (from September 2013-to-September 2014), the bank’s advances’ had almost stood at the same level with the bank taking a conscious decision of not to expand its advances book.
On recoveries, Gupta said the bank’s committee has approved a proposal to declare Winsome Diamonds as a “wilful defaulter”
BOM has an exposure of about ₹ 275 crore to Winsome Diamonds, which has turned a NPA to a consortium of public sector banks.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.