(Photo: Mint)
(Photo: Mint)

Corporation Bank plans to raise 5,000 crore in FY20

  • The lender had posted a net loss of 6,332.98 crore in 2018-19
  • Under Basel III norms, the bank is required to maintain total CRAR of 10.875%

New Delhi: Public sector lender Corporation Bank plans to raise up to 5,000 crore through issuance of fresh equity shares, debt instruments on private placement basis, rights issue or through QIP in the current fiscal.

The bank will seek approval from shareholders at its meeting scheduled for 29 June for raising of capital by issuance of fresh equity shares or by issuance of additional tier I or tier II capital as per Basel III guidelines, Corporation Bank said in its annual report 2018-19.

The bank said it will create such number of equity shares and/or debt instruments on a private placement/public issue for investors for an amount not exceeding 5,000 crore in one or more tranches.

On the intent of the capital raise plan, Corporation Bank said it may require additional capital from the market to support the projected business requirements and at the same time maintain healthy CRAR, in line with capital raising plan and as per reform agenda undertaken.

Under Basel III norms, the bank is required to maintain total CRAR (Capital to Risk Adjusted Assets Ratio) of 10.875%, it said in the report.

The lender had posted a net loss of 6,332.98 crore in 2018-19 as against a net loss of 4,053.94 crore in the previous year.

Total income too fell to 17,494.70 crore compared to 19,941.41 crore.

"Operating profit of the bank stood at 3,894.47 crore during the year 2018-19. However, with increased provisioning on NPAs, the bank posted net loss of 6,332.98 crore for the year 2018-19," said P V Bharathi, Managing Director & CEO of the bank.

During the fiscal, there were cash recovery and upgradation of NPAs of 5,192.76 crore, up from 4,508.76 crore in the previous financial year, the bank said in the report.

Due to loss, the board of directors of the bank has not recommended any dividend for 2018-19.

Bharathi said the severe pressure on asset quality during the year ended March 2019 was not an isolated case but was the part of overall industry phenomenon.

The bank said the focus will be on recovery of bad loans, emphasis on retail loan portfolio and will continue with rigorous efforts of credit monitoring and to arrest effectively the rising trend in slippages during coming years.

Its gross non-performing assets (NPAs) stood at 17.35%of the gross advances at March-end, 2019 against 15.35% year ago.

Net NPA ratio too came down to 5.71% from 11.74% earlier.

Also, there were recoveries to the tune of 706.88 crore in written-off accounts during the year, up from 318.06 crore recovery a year ago.

This story has been published from a wire agency feed without modifications to the text.

Close