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Allahabad Bank looking at raising capital next fiscal

Press Trust of India  |  Kolkata 

City-based Bank, which had recently come out from the prompt and corrective action (PCA) after RBI removed it from the watch list in February, is looking ways to raise capital in the next financial year, an said.

The would be weighing the options of dilution of stake in the general insurance joint venture and sell off non-core assets like properties in places like Mumbai, MD and of S S Mallikarjuna Rao told reporters here on Friday.

"Bank has come out of the It is only the starting point", Rao said, adding that this had happened due to infusion of capital by the government as some conditions relating to net NPA and CRAR were breached", he said.

Rao said that net NPA of the bank had fallen below six per cent, adding that recovery would be the mainstay for further lowering of NPA.

"Expecting that the bank would book profits in 2019, the capital infusion by the government was for meeting regulatory requirements. However, some growth capital is also needed but we are not worried about that", Rao said.

As per SEBI requirement, there was still headroom for the government to dilute stake in the bank, Rao said.

He said that the bank was having 12 properties which were identified, adding that the bank was targeting to raise Rs 250 crore to Rs 300 crore by selling the non-core assets, like properties.

and others like Indian Overseas Bank, and which had formed the non-life insurance company had already appointed a for the valuation of the JV.

"Efforts will continue to get capital out of Universal Sompo and also from selling off non-core assets like properties", Rao said.

On the whole, he said that the bank would be looking at raising Rs 500 crore probably in the next fiscal by way of stake dilution and sale of non-core assets.

of Universal Sompo O N Singh said that the insurance JV stated with an initial capital of Rs 150 crore and was making profits.

The JV launched a exclusively for customers.

Singh said that the exclusive would help to raise its savings accounts deposit base.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, March 15 2019. 15:25 IST