Kerala-based South Indian Bank on Thursday appointed JP Morgan, JM Financial and SBI Capital Markets as merchant bankers to its proposed capital issue.
The Thrissur-headquartered bank plans to raise capital of Rs 1,000 crore by September this year by taking the QIP (Qualified Institutional Placement) route, its Chief Executive and Managing Director, Dr A. V. Joseph, told Business Line after the meeting of the bank's board.
“We expect to complete the process in about a month,” he added.
The bank went for QIP in 2007, when its business was around Rs 14,000 crore. The issue size then was Rs 326 crore.
Four years later in 2011, when its business volume grew to Rs 52,000 crore, the bank once again decided to raise capital to take care of its future requirement.
“The sum that we have proposed to raise now will take care of our requirement up to 2015, when our business would reach Rs 1,25,000 crore.”
“Our capital adequacy ratio is at 14 per cent at present. This issue is expected take it to 17-18 per cent. Again by 2015, with the expected growth in business, it would come down to the current levels,” said Dr Joseph.
NBFC plan
Answering a query on the bank's plan on starting an NBFC arm, the SIB Chief said, “We are interested but this proposal will have to wait for now. The banking regulator, it is understood, is coming up with some detailed guidelines on this.
“It can be expected any time now. We will be able to take a decision once the guidelines are made known.”
(SIB, it may be recalled, got an in-principle nod from the banking regulator early this year for altering its object clause in the Memorandum of Association to form a non-deposit-taking non-banking finance company, as a wholly-owned subsidiary of the bank.)
More branches
The bank is planning to add over 60 branches to its branch network to take the total to 700 by the end of this fiscal. “This will include one branch in Nagaland, where we do not have a presence as of now.
“With the opening of these branches, SIB would be present across the country excepting three States in the north eastern region,” he said.
The 16 regional office of the bank is to be inaugurated at Kannur on July 1.
Dr Joseph said that this office was proposed for better control as the bank did not have a strong presence (many branches) in the northern part of Kerala.