Proposed fund-raising to raise bank’s overseas credit exposure by Rs 4,500 crore; bank’s net profit up 7 per cent.
Indian Bank is planning to raise $1 billion (around Rs 4,400 crore) through the issue of medium-term notes (MTN). According to senior officials, the bonds will be listed at the Singapore Stock Exchange.
The proposed fundraising will increase the bank’s overseas credit exposure by Rs 4,500 crore.
Speaking to reporters after declaring the bank’s annual results in Chennai on Saturday, T M Bhasin, chairman and managing director, said the bank’s board had given its nod for the listing and the formalities required to initiate the fundraising would be completed in three months.
He said the money would be raised in two or more tranches. As of now, the bank’s overseas business stands at Rs 3,500 crore.
“Almost all Indian companies are setting up offices in Singapore. In Sri Lanka, there’s a growing demand for funds to develop infrastructure and gain from the nation’s economic growth “, he said.
| PERFORMANCE SHEET (For quarter ended March) | ||||
| Indian Bank | Dhanlaxmi Bank | |||
| (in Rs crore) | 40,603.00 | % Chg* | 40,603.00 | % Chg* |
| Interest earned | 2,594.18 | 29.54 | 296.17 | 96.86 |
| Other income | 271.62 | -13.82 | 46.08 | 44.32 |
| Total income | 2,865.80 | 23.65 | 342.25 | 87.66 |
| Interest expended | 1,483.17 | 35.98 | 205.74 | 93.00 |
| NII | 1,111.01 | 21.85 | 90.43 | 106.23 |
| Net profit | 438.86 | 7.05 | 11.15 | 99.11 |
| *Over previous year; data compiled by BS Research Bureau Source : Capitaline | ||||
Commenting on the bank’s follow-on public offer, he said an application for the same had been placed before the government and the bank would come out with the issue soon. The bank is planning to raise around Rs 1,200 crore through the issue of fifty milion shares.
Meanwhile, the bank on Saturday reported a 7 per cent increase in net profit at Rs 438.86 crore for the fourth quarter ended March 31. Total income grew by 23.65 per cent to Rs 2,865.8 crore in the January-March quarter from Rs 2,317.73 crore in the same quarter a year ago. For the whole financial year 2010-11, the bank's net profit rose by 10.23 per cent to Rs 1,714.07 crore, compared to Rs 1,554.98 crore in the previous year.
As for 2011-12, the focus would be on retail and recovery as there was a huge opportunity in recoveries being made from the technically written-off book, which was around Rs 1,800 crore, said Bhasin.
“Even if we recover 20 per cent of that, Rs 360 crore comes to my profit. We will be focusing more on retail deposit growth, in addition to retail book growth on the loan side, “ he said.
DHANLAXMI BANK’S NET DOUBLES
Higher interest income and better margins helped Dhanlaxmi Bank double its net profit to Rs 11.2 crore for the quarter ended March, as against Rs 5.6 crore in the year-ago period.
Net interest income, or the difference between interest income and interest expense, rose 106 per cent year-on-year to Rs 90.4 crore. Net interest margin improved to three per cent, as against 30 basis points a year ago.
“We will like to maintain our margin at the current level,” chief financial officer Bipin Kabra told Business Standard.
Advances and deposits expanded 81.1 per cent and 76.5 per cent, respectively. Gross non-performing asset ratio declined 80 basis points to 0.7 per cent on the back of bad-loan recoveries worth Rs 10.41 crore.
As on March 31, its capital adequacy ratio stood at 11.8 per cent under Basel II.
