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Corporation Bank to raise Rs5,000 crore in 2 years

Corporation Bank to raise Rs5,000 crore in 2 years
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First Published: Mon, Apr 12 2010. 10 11 AM IST
Updated: Mon, Apr 12 2010. 10 11 AM IST
Kolkata: State-run Corporation Bank is planning to raise Rs20 billion in FY11 to meet credit growth, a top official told Reuters in a weekend interview.
“We will require Rs50 billion over the next two years. Of this we are planning to raise Rs20 billion in the current financial year via combination of Tier-I and Tier-II capital,” J.M. Garg, chairman and managing director, told Reuters in an interview.
The lender is considering tapping the equity market the next fiscal via a rights issue or a follow-on public issue and raise around Rs30 billion, he added.
“We have not approached the government as yet, but next year we would like to go for either 1:2 rights issue or a follow-on offer, depending upon the market conditions,” he said.
The bank is targeting a loan growth of 25% during FY11 and hopes to maintain a net interest margin of 2.55-2.6%, Garg said.
SURGING CREDIT DEMAND
The bank is expecting to report a credit growth of 32% on a year-on-year basis for the year ended 31 March, 2010.
“Credit growth has really picked from the last quarter and we are experiencing increased demands from the sectors like real estate, infrastructure, retail and SME,” he said.
The net interest margins during FY10 is seen at around 2.4%, and the effect of lower treasury income is expected to be mitigated by robust fee-based income, he said.
“Fee-based income during FY10 is expected to be around Rs6.5 billion compared to Rs4.5 billion last year,” he added.
The bank is scheduled to declare its full year financial results by 30 April.
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First Published: Mon, Apr 12 2010. 10 11 AM IST