Allahabad Bank to raise $500 m to fund HK ops

Allahabad Bank - (Amalgamated) | Bank - Public | BFSI | BSE: 532480 | NSE: ALBK

10 May 2011 Evaluate

Allahabad Bank plans to raise $500 million overseas to fund its swelling Hong Kong business, which has trebled this fiscal. Hong Kong has a 45,000-strong ethnic population and the bank is looking to launch its second branch at Kowloon to make most of the potential. The bank is also planning to open branches in Singapore, Shanghai and Dhaka and increase the share of its overseas business from a mere 1.5% of total business.

The bank will issue dollar-denominated medium term notes (MTN) with a five-and-a-half years maturity and list it in the Singapore Stock Exchange. It will raise the fund in a couple of months. Recently, Indian Bank and Canara Bank announced their plans to raise $1 billion and $150 million, respectively through MTN programmes.

Its first overseas branch in Hong Kong’s central business district has built a loan portfolio of 3,300 crore in four years from inception, reflecting a 200% growth during FY11. The bank has already placed a request with Reserve Bank of India for branch licences in Kowloon, in the northern part of Hong Kong, Singapore, Shanghai and Dhaka. Back home, it plans to open 155 branches and 500 ATMs this fiscal. Overall, it aims at a 25% growth in the lending business to an over Rs. 94,571 crore advances portfolio.crack crack