Syndicate Bank plans a capital infusion of about Rs.3000 crore through a combination of bonds and sale of shares to large institutional investors this year to strengthen its operations. “To strengthen the bank and support further growth, we need to mobilise capital,” T.K.Srivasatava, Executive Director of the Manipal-based bank said.
“We are quite hopeful that this year we will be raising about Rs.1500 crore in Tier 1 capital and similar amount in Tier 2 capital.” The mid-sized PSU bank with more than 3500 branches expects lower growth this fiscal year.
The bank would look to raise Rs.500-Rs.1000 crore through Tier 2 bonds and for Tier 1 capital, it may look at the QIP (qualified institutional placement) route for infusing at least about Rs.500 crore over the next two quarters. The proposed additional capital is expected to take care of its requirements for the next two years.
Syndicate Bank received Rs.490 crore from the government last year. It is hopeful of getting at least about Rs.500 crore in the second tranche of capital infusion the government will be making to the PSU banks this fiscal. In the first tranche, six banks received capital.
Mr. Srivastava said the bank was working on improving asset quality and there would not be any big surprises during the second quarter. The bank actually reported higher slippages at Rs.1990 crore in the first quarter compared with Rs.831 crore in the preceding quarter.
Retail loans would continue to be the key focus area for the present fiscal and the segment was expected to maintain growth of about 25 per cent, he said. However, overall business growth for the bank this year may be below 15 per cent. During this fiscal, the bank plans to add 300 new branches and hire about 4000 people across categories.
