Corporation Bank to raise tier II capital, long term bonds

Bangalore, Feb 23 (UNI) Corporation Bank proposes to raise a Tier II Capital of Rs 500 crore through Non-Convertible Subordinated Debts in one or more tranches.

The additional capital was being raised to meet the Basel II requirements for credit risk/market risk as well as operational risk, the Bank said in a release here today.

The Capital Adequacy Ratio of the Bank was comfortable at 14.91 per cent as on December 31, 2005, it added.

The Bank also proposed to issue Long Term Bonds to the extent of Rs 1,000 crore in one or more tranches for financing infrastructure.

In view of the deployment opportunity and national importance attached to infrastructure lending, the Bank had been participating in financing infrastructure for the last few years. Its deployment of credit to infrastructure formed 8.60 per cent of the Net Bank credit. Considering the scope for further financing to this growth sector, the Bank had proposed to raise Rs 1,000 crore by way of infrastructure bonds to augment its long-term resources so as to smoothen the asset-liability maturity matching, the Bank said.

UNI VK GD GM1458