Indian Bank to raise Rs 1,000 crore via subordinated tier-II bonds

27 May 2013 Evaluate

In a bid to shore its capital base, Indian Bank is planning to raise Rs 1,000 crore by the way of subordinated tier-II bonds in the third quarter of this year. The proposed issue of bonds have been rated AAA by rating agencies -- CRISIL and CARE. In addition, the bank has already secured permission from government to dilute its stake further by 10% however will not tap that option as of now. The lender would also merge two of its three subsidiaries - Indbank Housing and Indfund Management with itself.

Indian Bank’s capital adequacy ratio (CAR) as of March 2013 was 13.08% with tier - I capital of 10.88%. The bank’s net profit for the quarter ended March 31, 2013 declined by 15.43% at Rs 292.13 crore for the quarter as compared to Rs 345.42 crore for the quarter ended March 31, 2012. However, bank’s total income increased by 14.99% at Rs 4022.47 crore for the quarter under review as compared to Rs 3498.02 crore for the corresponding quarter of the previous fiscal.

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