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Corporation Bank plans to raise Rs 4,000 crore capital in two years

The bank came out of the Reserve Bank of India's Prompt Corrective Action regime in the fourth quarter ended March 2019

Abhijit Lele  |  Mumbai 

corporation bank
Corporation Bank

Public sector lender plans to raise capital up to Rs 4,000 crore over two years to back loan growth. It would look at combination of equity, tier I capital based on market conditions.

The Mangaluru-based Bank would look at raising Rs 2,000 crore in the second or third quarter of the current financial year (FY20) and balance in FY21, said P V Bharathi, managing director and chief executive, at analyst meet in Mumbai on Friday. Its stock closed flat at Rs 24.75 per share on BSE.

While the present capital base is comfortable, the bank will require additional capital for expanding loan book. Plus, “as a listed entity, Sebi regulations require us to bring down promoter holding from about 93 per cent to about 75 per cent”, she said.

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The bank will also have the benefit of retained earnings in FY20 as it working to report profits from first quarter (Q1FY20), she added.

Its capital adequacy ratio was 12.30 per cent with common equity tier I (CET 1) of 10.39 per cent in March 2018. The bank came out of the Reserve Bank of India’s Prompt Corrective Action regime in the fourth quarter ended March 2019. Referring to the pace of lending in FY20, she said the bank has taken a conservative growth estimate of 7-9 per cent for this year. It will be slow and steady growth in all segments, Bharati said.

First Published: Fri, May 24 2019. 19:40 IST
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