Vijaya Bank may raise Rs300 crore more in Q4

Vijaya Bank may raise Rs300 crore more in Q4

Bangalore: After successfully raising Rs200 crore by selling lower-tier II, 10-year bonds, Vijaya Bank may go for another round of fund raising in the fourth quarter. The bank may raise another Rs300 crore by March, says chairman and managing director Prakash P. Mallya, through upper-tier II bonds or perpetual bonds, though the coupon rate hasn’t been fixed.

“The bank had raised Rs200 crore as a precautionary measure, as we had a bulk of loans in the pipeline. We may go for another round of fund raising depending on the market condition," Mallya said.

A number of banks across India, including Bank of Baroda, Dena Bank, UnionBank of India, are issuing bonds to fund operational needs and to fulfill their new capital requirements under Basel II capital norms.

Vijaya Bank, which will open its 1,000th branch on Saturday, also plans to strengthen its presence in the north. It plans to add another 50 branches across India by March, and some 50% of the new branches would be in cities such as New Delhi, Ludhiana and Chandigarh, Mallya said.

The bank is also “keen" on expanding overseas and has applied for expansion in Dubai, China, Hong Kong and Kuala Lumpur, Mallya said.

Mallya said, as of December, the bank has already generated total business worth Rs70,000 crore. For 2007-08, the bank has targeted a total business of Rs76,000 crore, including deposits of Rs45,000 crore and gross advances of Rs31,000 crore. On Saturday, the bank will launch what it calls as V-GenUth product, a savings bank account designed for children from birth through post graduation. It also plans to offer educational loans at a concession of 0.50% on the prevailing rate, to these account holders. Mallya expects 50,000 customers by March.