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Vijaya Bank expects Rs700 crore of recapitalization

Vijaya Bank expects Rs700 crore of recapitalization
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First Published: Wed, Mar 03 2010. 03 19 PM IST
Updated: Wed, Mar 03 2010. 03 19 PM IST
Mumbai: State-run Vijaya Bank to get Rs7 crore of capital from the union government, part of which is expected by March-end, its chairman and managing director said on Wednesday.
“We expect the remaining part of the sanctioned capital to come in next fiscal,” Albert Tauro told Reuters over phone from the southern city of Bangalore.
The lender, 53.87% owned by the union government, also expects to get a pie of the Rs16, 500 crore recapitalization plan announced by finance minister Pranab Mukherjee in the federal budget, Tauro said.
The bank currently has a capital adequacy ratio of 13.34%, with the tier I capital at 6%.
The federal government wants banks to maintain a minimum capital adequacy of 8% in the tier I capital by 31 March, 2011.
Capital infusion would help the bank raise its tier I capital to desired level, said an analyst in a Mumbai-based brokerage.
Vijaya Bank is also planning to sell non-performing assets worth Rs200-Rs259 crore by March-end.
“We are in the process of calling for bids from asset reconstruction firms,” he said.
Its gross non-performing assets stood at 2.57%, while the net non-performing assets were at 1.30%.
The bank expects to end the fiscal year with a loan growth of 14-15%, mainly from disbursements in infrastructure and short term lending.
“We want to grow in the personal loan segment next year,” Tauro said.
The bank is also looking at more lending to the industrial sector in FY11 and expects loan growth to pick up 16-18% in next fiscal.
Currently, infrastructure lending and retail loans make up the loan portfolio of the bank that stood at Rs41,000 crore, Tauro said.
At 3:15 p.m., shares in the bank, which market values at $458 million, were up 1.75% at Rs49.50 in the Mumbai market that was up 1.28%.
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First Published: Wed, Mar 03 2010. 03 19 PM IST