Vijaya Bank plans tier II bonds issue

Public sector Vijaya Bank plans to raise Rs 200 crore through an issue of upper tier II bonds in this month.

The bank is also planning a major expansion of its network as it wants to open 32 new branches by the end of the present financial year.

Vijaya Bank Chairman and Managing Director Prakash Mallya told reporters here that the bank has seen a major rise in the credit offtake in the recent months and would like to be prepared to meet the increasing demand from corporates while maintaining a healthy capital adequacy ratio. The bank's CAR presently is 11.38 per cent.

The Rs 200 crore bonds issue will be made in March 2007 itself, and more money will be raised in the year 2007-08 as there is a headroom of nearly Rs 1,200 crore available to the bank, Mallya added.

Mallya said that the bank's business has seen a sizeable jump over the first nine months and the net profit is expected to shoot up to Rs 350 crore from Rs 126 crore last year. The rise in profits is due to a better cash recovery which is likely to exceed Rs 275 crore in 2006-07, he explained.

The bank is also planning an expansion of its branch network in the northern region, and will open 32 branches before the end of the present fiscal, Mallya said.

Maharashtra, which falls in the North Region for Vijaya Bank, has 80 branches and gives a business of Rs 12,000 crore to the bank's total business of Rs 60,000 crore, he added. Pune will have four new branches in the next year, he said.

Alongside branch expansion, the bank will also open more ATM centres and the number of ATMs will rise from 167 now to 350 by March 2008, Mallya said.