Indian Overseas Bank (IOB) plans to raise $500 million this fiscal to fund its business growth overseas. The funding will be through a Medium Term Note (MTN) programme, which is basically a debt instrument with a maturity of 5-10 years.
IOB's Chairman and Managing Director, Mr M. Narendra, said the bank was waiting for an opportune time to raise the money as the cost of raising funds through this route had gone up. Investors are now looking for a higher yield from MTNs. Last fiscal too, the bank had raised $500 million through the MTN route, Mr Narendra said.
IOB's overseas operations had recorded 40 per cent growth in 2011-12, he said, adding that certain markets abroad had provided ample growth opportunities for the bank.
Mr Narendra, who was in the Capital on Monday, also said IOB was eyeing a 20 per cent growth in credit in 2012-13, higher than the 16 per cent growth guidance given by the Reserve Bank of India. In 2011-12, its advances grew 26 per cent.
IOB is aiming to maintain its net interest margin at 2.75 per cent in the current fiscal, he added. On whether he expects the RBI to further cut repo rates (the rate at which it lends to banks) in its upcoming credit policy review, Mr Narendra said it was too early to comment. He said any cut in the cash reserve ratio (the portion of depositors' balances a bank has to have on hand in cash, according to Investopedia ) was, however, unlikely.