Bangalore-based Vijaya Bank is seeking a capital infusion of Rs 1,800 crore from the government to maintain its capital adequacy ratio (CAR) at the mandatory 12 per cent. Its CAR is currently at 10.4 per cent.
"The bank will need this amount till 2011 and expects the government to infuse the capital in tranches. This will raise the CAR in tier-I cities by 6 per cent and will help the bank maintain its overall CAR at around 12 per cent," said Vijaya Bank Chairman and Managing Director Albert Tauro.
Speaking to the media here on Tuesday on the sidelines of a performance review meeting, Tauro said it would take about a month before the government decides on releasing the amount.
The bank, which registered a net profit of Rs 80 crore in the second quarter ended September 30, 2008, as against a loss of Rs 76 crore in the first quarter, slipped on the non-performing assets' front in the first half of the year and added bad debts worth Rs 280 crore due to defaults in commercial and industrial advances and personal loans.
"The last two quarters saw muted growth and the outlook will remain the same for the remaining two quarters," Tauro said.
The bank is now focusing on corporate lending, which forms about 24 per cent of its business, for increasing its revenues. "There is a general slowdown in the capex plans, personal loans and retail advances,'' he said.
Besides, it is piloting SMS banking and is awaiting Reserve Bank of India's approval to start mobile banking. Tauro said they propose to start four more backoffice operations at various locations apart from the one coming up at Bangalore.
The public sector bank, at the end of the second quarter, did a business of Rs 89,328 crore. Its deposits stood at Rs 52,616 crore while advances were at Rs 36,712 crore. Andhra Pradesh accounted for 8 per cent of the total business.
