Bank of Baroda to raise $750 Mn

By SiliconIndia   |   Monday, 24 December 2007, 08:00 Hrs
Printer Print Email Email
Mumbai: Anil K Khandelwal, the chairman and managing director, Bank of Baroda (BoB), said on Wednesday that the bank plans to raise around $750 million capital through a bond issue in January 2008, reported The Daily News Analysis.

"We are raising capital mainly to fuel our business growth and to meet Basel II requirements," Khandelwal said after announcing the bank's results for the half year ended September 2007.

Net profit has risen by 45.7 percent to $164.5 million during the first half, which ended in September 2007 from $112 million in the year-ago period. Profit on the sale of investments improved by 230 percent to $64.35 million. Fee based income grew 13 percent to $57.25 million.

On the impact of the Reserve Bank of India's move to hike the cash reserve ratio (CRR) hike by 50 basis points, Khandelwal said BoB has suffered a loss of $3.25 million.

While BoB will kick off its insurance business by November, its credit card business is likely to start off by December 2007. Khandelwal said BoB will concentrate on growing its fee-based income, low-cost deposits and international operations. CASA, as a proportion of deposits, is 37 percent as on September 2007, as against 40 percent a year back.

"Low-cost deposits have slid as people are moving away from deposits today. As stock markets are booming, people prefer to invest there," Khandelwal said.

International operations have contributed 24 percent of the bank's total business and BoB is targeting to achieve a 40 to 50 percent growth.

The bank's capital adequacy ratio stands at 12.90 percent as on September 2007. "With Basel II getting implemented, we think our capital adequacy ratio should be affected by a percentage," Khandelwal said.

Meanwhile, BoB's net non performing assets are down from 0.77 percent as on September 2006 to 0.55 percent as on September 2007. The bank is targeting deposit growth of 22 percent and credit growth of 25 percent for the remaining part of the year.

Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..