Exim Bank eyes Japanese mkt for fund raising as other avenues turn costly

Following roadshow in December 2018, it may come out with bond issues based on market conditions in January-February 2019; Looks to fund projects in EMs like Africa, Bangladesh

Even as it readies itself for a fresh round of fund raising, the Export Import Bank of India (Exim Bank) is eyeing Japanese shores. 

Having already conducted a roadshow in December 2018, the Exim Bank is looking to tap Japanese market with bond issues based on market conditions in January-February 2019, David Rasquinha, Managing Director, Exim Bank told Business Standard. 

"We may target the Japanese market (for fund raising) which is very receptive to good Indian names. We did a roadshow there in December and it was well received. So if the market conditions look good in January-February we may tap the Japanese market," Rasquinha said.

The move comes in the wake of rising challenges in markets like the US with cost of raising funds going up. Based on market conditions, the bank plans to raise anywhere between $1 billion to $2 billion from various markets through bond issues, similar or more to last year. 

"We typically raise funds in the international markets because more than 70 per cent of our loan portfolio is in US dollars. So we tap the bond markets. So we will go to the bond markets for anywhere between $1-2 billion (Rs 7,000 crore to Rs 1,4000 crore). The last time we did that was in January 2018. So it is soon going to be time for us to go the market. We will see the markets and then decide," Rasquinha told Business Standard.

According to Rasquinha, as against fund raising, it is deployment of funds that is set to pose some challenge going forward. However, the bank is eyeing emerging markets to address the same. 

"If you look at the African continent, probably eight out of 10 fastest growing countries are from that region. So we are looking at doing a lot of business in Africa. We have a large exposure in Bangladesh, including one of our largest single exposures where we are funding railway projects, power projects, homes, etc. It is not that the entire world is doing badly. There are bright spots and we look to target those target spots. Nepal and Sri Lanka will be growth areas too," he added.

As part of its African strategy, Exim Bank had recently extended a credit facility of $500 million (approximately Rs 3,400 crore) to Tanzania for water supply projects as part of an agreement signed on May 10, 2018 with the Tanzania government.

Dwelling on non-performing assets, Rasquinha said the bank was confident of bringing down the current net NPA rate of four per cent, as well as addressing minor defaults in its international portfolio. 

"Export financing has been quite good in the past nine months. Just that in the world around us, certain countries are putting tariffs and trade wars so it makes life a little bit challenging. However, in terms of the first nine months' performance, the growth has been ahead of last year. We have also projected that the full year numbers will be more than last year although we won't know that until the year is completed," he said.

Last month, Exim Bank had stated that the country's export growth would surge to seven per cent for the October-December quarter, with merchandise exports set to rise to $82.39 billion (Rs 5,700 crore roughly) for Q3 of fiscal 2018-19, as against $77 billion (Rs 5,300 crore approximately)