South Indian Bank (SIB) has received its shareholders' approval to raise around Rs 1,000 crore through qualified institutional placement (QIP). The bank is planning to dilute 33 per cent equity through the proposed placement.
Besides, the bank is also planning to float a subsidiary for lending gold loans.
Speaking to Business Standard after the bank's AGM, VA Joseph, chairman, SIB, said the bank plans to increase its total business (deposits and advances) to Rs 1.25 lakh crore by March 2015, from the current Rs 50,500 crore.
“To support this business growth plan for the next four years, the bank has decided to raise Rs 1,000 crore from qualified institutional investors. We will dilute around 33 per cent through the placement,” he said.
He noted that at present NRIs / FIIs hold 42 per cent in the bank. After the placement, it would go up to 49 per cent, which is the maximum prescribed by the regulator.
The bank's capital to risk-weighted assets ratio (CRAR) stood at 14 per cent with Tier I capital at 11.27 per cent in fiscal 2011 against 15.4 per cent with Tier I capital of 12.42 per cent a year ago.
The management expects to raise capital of Rs 1,000 crore in the next fiscal.
Joseph said the bank was planning to float a subsidiary NBFC for gold loans, and the final decision on it was waiting for RBI's decision on the norms. It may be noted that 20 per cent of the bank's advances are in gold loans.
The bank plans to open 57 new branches in the current year taking it to 700 by March 2012, from the current 643. From the following year, it would add 50 branches every year.
