Corporation Bank to raise Rs700 cr to fund business growth

Corporation Bank to raise Rs700 cr to fund business growth

New Delhi: Public sector Corporation Bank plans to raise an additional Rs700 crore from bonds in the second quarter to fund its growing business which may cross Rs1,50,000 crore this fiscal.

“We have raised Rs1,300 crore from Tier I and Tier II bonds so far and will raise another Rs700 crore in the July-September quarter," the bank chairman and managing director, J M Garg, told the agency.

The capital raised during the second quarter would be sufficient to maintain capital adequacy ratio (CAR) over 12% and meet targeted business growth for the fiscal, he said.

The CAR of the Mangalore-based bank stood at 16.29% at the end of first quarter of the current fiscal.

During 2009-10, the bank is expecting credit growth of 22%, he said, adding, the outstanding credit of the bank stood at Rs47,377.59 crore at the end of 30 June, 2009.

Talking about the business expansion, Garg said that the bank expects the total business to cross Rs1,50,000-crore mark during the current fiscal.

“We are expecting the business mix to be about Rs1,50,000 crore in 2009-10," he said.

At the end of 30 June, 2009, the total business of the bank stood at Rs1,19,505 crore, registering an year-on-year growth of 27.5%.

On the back of healthy growth in core business and other incomes, the bank expects to chart 25 per cent growth in net profit.

“We would be happy if our net profit rises by 25% in 2009-10," Garg said.

The bank had earned a net profit of Rs893 crore for the financial year ended March 2009.

During the first quarter ended June 2009, the bank’s net profit increased by around 42% to Rs261.25 crore against Rs184.3 crore in the same quarter last year.

Total income increased to Rs2,101.52 crore in the latest quarter to Rs1,446.28 crore in the corresponding period a year ago.