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Manipal-headquartered public sector lender Syndicate Bank plans to raise fresh capital of Rs 2,650 crore during the present fiscal. Of this, Rs 1,500 crore will be equity capital and the amount will be raised via Basel-III complaint Tier-II bonds. The bank will explore options like qualified institutional placement, rights issue and follow-on public offer for raising equity, a top official of the bank said.
"Based on the projected internal accruals, at present the bank is comfortable in complying with CRAR as per Basel III guidelines. However, in order to maintain CRAR of 12 per cent the Bank proposes to raise Equity Capital by way of Rights Issue / QIP (Domestic / Foreign) / Follow on public issue based on market conditions and approach the market for Basel III compliant Additional Tier 1 Bonds and Tier 2 Bonds in the future," said Sudhir Kumar Jain, Chairman and Managing Director.
Talking to reporters, he said the board has also approved the bank to raise the funds through Medium Term Notes (MTN) in overseas market for funds requirements of London branch up to $2 billion as and when the interest rates are favourable and based on the Loan book building of London branch.
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"The bank would launch a road show in the next 15 days to raise the funds through Medium Term Notes (MTN) in overseas market for fund requirements of London branch," he said.
Jain said the bank has drawn its long term plan "Vision 2020" for reaching business level of Rs 10 lakh crore. Bank has revisited its Vision and Mission statements along with lot of initiatives are being taken to reach vision 2020 goals. Bank has brought all these initiatives under SyndNayiDisha, he said.
During 2013-14, the global business of the bank increased 16 per cent year-on-year to Rs 3,34,779 crore from Rs 3,88,584 crore in FY13. Deposits grew 15 per cent to Rs 2,12,343 crore, while advances increased 16 per cent to Rs 1,43,735 crore. Domestic CASA (current account savings account) deposits stood at 29.90 per cent of the total deposits.
"The bank is taking a series of measures to increase the CASA level to 31.5 per cent during the fiscal 2014-15. We will soon launch a CASA campaign to increase the level," Jain said.
The bank's gross non-performing assets have gone up by 55 per cent to Rs 4,611 crore in the March quarter of 2014 from Rs 2,979 crore in the same quarter last year. The percentage of Net NPAs stood at 1.56 per cent from 0.76 per cent in the year ago period. The return on assets has come down to 0.70 per cent from 1.19 per cent a year ago. The capital adequacy ratio under Basel-III stood at 11.41 per cent.
Syndicate Bank proposes to open about 400 branches Pan India which include specialised branches like Mid Corporate, MSME branches, to give focused attention to target group borrowers.
The bank is also taking steps to open branches in South Africa, Dubai Financial Centre, Hong Kong, Thailand and China.
During 2014-15, the Bank will open 5 more new Regional offices namely Ludhiana, Salem, Shimoga, Varanasi and Visakhapatnam.
