Canara Bank to raise Rs782 cr from bonds in Round 2 of funding

Canara Bank to raise Rs782 cr from bonds in Round 2 of funding
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First Published: Fri, Jan 11 2008. 12 05 AM IST

Canara Bank’s Rao
Canara Bank’s Rao
Updated: Fri, Jan 11 2008. 12 05 AM IST
Bangalore: After successfully raising Rs700 crore from selling bonds last week, Canara Bank, India’s third largest state-owned bank in terms of assets, intends to go for another round of fund-raising before end-March. The bank will raise Rs782.1 crore by issuing tier-II bonds, said chairman and managing director M.B.N. Rao.
Canara Bank’s Rao
“Finer details of the issue, like coupon rate, have not been fixed yet. The money raised would be used to finance growth and investments,” he said.
Canara bank, Rao added, had no dearth of funds, but wanted to enhance its capital. Earlier this month, the bank had issued tier-II bonds to raise Rs700 crore to boost its capital.
A number of banks across India, including Bank of Baroda, Dena Bank, Vijaya Bank and Union Bank of India, are issuing bonds to fund operational needs and to fulfil their new capital requirements under Basel II capital norms.
Meanwhile, Canara Bank said it is keen on expanding overseas. The bank currently has one branch each in London and Hong Kong. Rao said Canara Bank would have a branch in Shanghai in a few months. He said the Reserve Bank of India (RBI) has already approved five overseas bran-ches for the bank and 15 more were in process. Nationally, the bank has 2,600 branches.
On the issue of consolidation in the banking sector, Rao said he sees “long-term good” in the idea. He said Canara Bank would like to strengthen its presence in north and western parts of the country.
“We have a strong presence in the southern parts of the country. We are keen on becoming a national player. So it makes more sense for us to acquire a bank in the northern or western parts. We will announce one such acquisition this year. We have received approval from the RBI, unions and our board. We are in talks currently and have zeroed in on a bank. It is just a matter of time when we announce the deal,” Rao said.
He, however, declined to name the bank, saying it was a listed entity. Rao’s statement comes at a time when speculations are rife that Canara Bank is eyeing Mumbai-based Dena Bank.
For 2007-08, Canara Bank is targeting a total business of Rs2.9 trillion, including deposits of Rs1.7 trillion and advances of Rs1.2 trillion.
Canara Bank’s shares fell 4.21%, or Rs16.05, to close at Rs365.50 on the Bombay Stock Exchange on a day when the benchmark index declined 1.4%.
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First Published: Fri, Jan 11 2008. 12 05 AM IST
More Topics: Canara Bank | Bonds | Funding | Rao | Money Matters |