State Bank of Bikaner & Jaipur (SBBJ), a subsidiary of State Bank of India, is planning to raise around Rs 500 crore to meet its internal target for capital adequacy ratio.
B Sriram, managing director, SBBJ, who was here to open a new branch, said the total business of the bank stood at around Rs 1.40 lakh crore and it had set a target to grow by 13-14 per cent in 2014-15. The fund raising plan comes against the backdrop of this target.
He said the bank’s Tier I capital was comfortable at around 9.04 per cent and it required Tier II capital to meet the internal target of 12 per cent overall (both Tier II and Tier II). “We have enough cushion to raise around Rs 500 crore. Though their is no urgency now, when the market is favourable we will raise the money,” said Sriram.
Officials said the bank could raise the money from its parent, State Bank of India, or through Tier-II bonds for which it was awaiting clearance from SBI. However, he added it might stick to bonds issue.
Of the total advances, which is around Rs 65,000 crore, a major chunk of it is corporate advances, around Rs 10,000 crore each from agriculture and retail while the MSME comprises Rs 11,000-12,000 crore. “We want to give more thrust on retail and MSME portfolios,” said Sriram.
SBBJ reported a 33.71 per cent increase in net profit at Rs 238 crore during the quarter ended March 31, 2014, as compared with Rs 178.24 crore during the same quarter a year ago. Recoveries and higher fee income helped the bank to post a good set of numbers, said Sriram.
On expansion, he said, at present the bank had 1,148 branches across the country. Last year, it opened 113 branches and planned to open another 114 branches. “Of the total new branches, 20-30 per cent will be opened outside Rajasthan,” said Sriram.