Bangalore-headquartered public sector lender State Bank of Mysore (SBM) is planning to raise funds from the market through issuance of Tier-I and Tier-II bonds in the present financial year.
“After the rights issue last year, we are in a comfortable position as far as capital is concerned. However, we may raise some funds through the issuance of Tier-I and Tier-II bonds in the present financial year,” Dilip Mavinkurve, managing director of State Bank of Mysore, said on the sidelines of launching retail sales of gold coins through its branches here.
He, however, declined to give the amount of money being raised by the bank through this route. Earlier, the SBM raised Rs 540 crore in the middle of last year through a rights issue to ramp up its capital base.
Referring to the launch of gold coins, he said the bank was expecting to sell around 100 kg of gold in the present financial year.
“Gold coins will be available weighing from 2 gm to 50 gm. The price of gold will also be updated as per the change in the international market on a daily basis,” he said.
The bank, which is the corporate agent for SBI Life for selling life-insurance products along with a tie up with national insurance in non-life insurance space, expects credit growth of more than 20 per cent in the present financial year.
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“Credit growth is likely to be over 20 per cent in the present fiscal on the back of sound economic growth,” he said.
The bank has witnessed a subdued credit growth during the first nine months of FY11 due to poor demand.
In the meantime, the bank is planning to increase its fee-based income along with core operation.
State Bank of Mysore has registered a drop in its net profit by 6.5 per cent to Rs 132.04 crore in October-December period of the present financial year on the back of higher provisioning for non-performing assets.
The total income of the bank, however, increased by 16 per cent to Rs 1,154.36 crore during this period over the corresponding period last year due to higher interest income.
Operating profit of the bank also saw a 18 per cent rise to Rs 316.63 crore in the third quarter as compared with Rs 266.60 crore in the corresponding period last year.
Net interest income of the bank during this period increased by 28 per cent to Rs 443 crore from Rs 346 crore in the corresponding quarter last year.