Vijaya Bank set to raise tier-II bonds

Vijaya Bank is planning to raise Rs 500-600 crore through issue of upper Tier II bonds in 2006-07.

Prakash P Mallya, chairman and managing director, Vijaya Bank, said, "We might be raising Rs 500-600 crore upper Tier II capital during the current financial year, if required. We recently raised Rs 250 crore lower Tier II capital." The Tier II capital raised recently was at 9.25 per cent interest, he noted.

Mallya also said the bank still has headroom to raise another Rs 200 crore through lower Tier II bonds. Currently, the capital adequacy ratio (CAR) of the bank stands at 11.55 per cent.

The bank would decide on raising its prime lending rate (PLR) in the next couple of weeks. The bank raised its PLR to 11.25 per cent from 11 per cent in May.

"We are looking into the matter. Considering the market scenario, we will take a call regarding revision of PLR in 2-3 weeks," said Mallya. If there is any upward revision, it could be up to 25 basis points, he hinted.

Meanwhile, the bank is eyeing a total business of Rs 60,000 crore in 2006-07 compared with Rs 46,800 crore in 2005-06.

Deposits are targeted to grow to Rs 36,000 crore (Rs 28,884 crore) whereas advances are expected to touch Rs 24,000 crore (Rs 17,916 crore). The bank was awaiting the RBI approval for opening representative offices in China, Dubai and Hong Kong, he added.

The bank has also firmed up massive expansion plans. "We will be having 1,000 branches across the country by the year-end from 924 branches now, out of which 12 branches will be in the eastern region.