SBM plans Rights Issue to shore up Tier-I capital

State Bank of Mysore (SBM) is planning to raise fresh capital through a Rights Issue to shore up its Tier-I capital base. The board of directors of the bank is meeting on March 29 to consider Rights Issue to the shareholders of the Bank.

State Bank of India is the largest shareholder of the Bank with 90 per cent of the equity, while the balance 10 per cent is held by the public shareholders.

"Currently, we have adequate funds, but in view of the future growth requirements we need to raise funds. We want to be adequately funded to meet the requirements at least till 2015-16. The details of the rights issue will be finalised on March 29," a senior official of the bank said.

Currently, the Bank's capital adequacy ratio under Basel-II stands at 11.40 per cent and 11.19 per cent under the Basel-III norms. Under Basel-II, the Tier-I capital stands at 8.7 per cent and 8.58 per cent under the Basel-III as at end of December 2013.

The Bank had raised Rs 65 crore through an institutional placement programme (IPP) in May last year.

For the third quarter ended December 2013, SBM reported a massive fall of 45 per cent in its net profit at Rs 85 crore compared to Rs 154.77 crore in the corresponding quarter last fiscal. The total income went up 7 per cent to Rs 1,730 crore as against Rs 1,616 crore in the year ago period.