Vijaya Bank eyes acquisition

The Bangalore-based Vijaya Bank is planning to acquire a bank in northern/western India to expand its reach, according to Mr Prakash P. Mallya, its Chairman and Managing Director. “We are definitely looking at inorganic growth. A north-Indian bank has in fact approached us albeit there are no concrete developments thereafter,” Mr Mallya said. The bank, which had done a total business of Rs 73,000 crore as on December 31, 2007, is aiming at closing the current fiscal with a total business of Rs 76,000 crore and a net profit of Rs 450 crore. “We will touch one lakh crore business by 2009-10,” he said. The bank has 1,008 branches across the country and would take the number to 1,050 by the end of March, 2008. On the interest rates, Mr Mallya said there were no plans for a reduction. “There are certain banks which are charging higher rates. Most of them are now announcing a cut. We cannot do it,” he said. Vijaya Bank’s interest rate on housing loans is currently in the range of 9.2-10.75 per cent, he added.

Syndicate Bank opts for QIP route to raise capital

Syndicate Bank has decided to raise its additional capital through the qualified institutional placement route instead of the follow-on public offer programme planned early this year. Syndicate Bank’s move followed the Government’s recent liberalisation permitting public sector undertakings/enterprises to raise capital through placement with placements of equity with qualified institutional buyers (QIB). Bank of India has already received permission to tap QIBs and is poised to make the placement. QIBs include financial institutions, banks, mutual funds, foreign institutional investors registered with SEBI, venture capital funds and multilateral financial institutions. Syndicate Bank’s capital raising involves issuing an additional 8 crore (80 million) equity shares. The equity float was expected to bring down Government stake in the bank from the current level of 66.47 per cent to around 57.64 per cent. The bank currently has a capital to risk weighted asset ratio of 11.99 per cent. However, its tier 1 capital was 6.99 per cent or 99 basis points over the prescribed threshold of 6 per cent. Syndicate Bank also had the flexibility to raise at least Rs 240 crore through perpetual bonds, to push up the tier one capital ratio.