Karur Vysya Bank (KVB) has received the Foreign Investment Promotion Board's approval to issue shares worth Rs 107.50 crore to foreign institutional investors (FIIs). According to a bank's senior official, this will be 25 per cent of bank’s proposed rights issue worth Rs 450 crore.
“Before March 2011, the bank is planning to raise Rs 300-325 crore and the remaining, of the Rs 450 crore, will be raised by May 2011,” PT Kuppuswamy, managing director and chief executive officer, KVB, told Business Standard.
It may be noted that the bank had planned to come out with a rights issue during the current fiscal. Besides, it has also lined up plans to raise money -- to increase its netowned funds by another Rs 1,900 crore by 2016, its centenary year.
“By 2016, our business target is Rs 1.25 lakh crore, including Rs 75,000 crore deposits and Rs 50,000 crore advances. To support this, we may have to increase our netowned funds to Rs 4,000-5,000 crore from Rs 2,100 crore, which include the proposed Rs 450 crore rights issue,” said Kuppuswamy.
The bank's capital adequacy ratio is 14 per cent. It has set a target of Rs 50,000 crore total business by March 31, 2012. This as on March 31, 2010, stood at Rs 32,946.85 crore, an increase of 28.38 per cent year-on-year.
Kuppuswamy said increased focus on the Casa (current account savings account) segment helped the bank register a 37 per cent growth in the low-cost deposit segment year-on-year. “Our focus will be on improving Casa and advances segments and emphasis will be on customer acquisition,” he added.
