Lakshmi Vilas Bank (LVB) may raise Tier-1 capital to the tune of Rs.300 crore preferably through qualified institutional placement (QIP) to meet its working capital requirements, according to a top official.
“We are evaluating options. Placement through the QIP route would allow us to raise capital by commanding a higher premium,” M. Palaniappan, Chief Financial Officer at LVB, told The Hindu.
The funds would be used to meet the working capital requirements of the bank over the next two years, he said. The bank raised Rs.140 crore in Tier-II capital last year and Rs.406 crore in 2014 through a rights issues.
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The net profit rose 36.3 per cent to Rs.180.24 crore in FY 2015-16 and the operating profit improved by 10.5 per cent to Rs.407.12 crore.
“Profitability has become increasingly difficult in the banking industry,” Mr. Mr.Parthasarathi Mukherjee, Managing Director and Chief Executive Officer said. LVB would focus on increasing its fee-based income and improving the cost-to-income ratio, he added.
The total business grew 17.6 per cent to Rs.45,249.89 crore and advances by 20 per cent to Rs.19,818.93 crore. Deposits grew 15.8 per cent to Rs.25,430.96 crore during the year under review. The bank also reported a 20.6 per cent growth in CASA (current account, savings account). The net NPA (non-performing assets) declined to 1.18 per cent from 1.85 per cent in the previous year.
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