Canara Bank to raise USD 300 million from international market

Bangalore, Oct 19 (UNI) Public Sector Canara Bank will raise US Dollar 300 million from the international market to strengthen its capital adequacy position, its Chairman and Managing Director M B N Rao announced today.

Addressing a press conference after releasing the financial results for the second quarter here, he said the funds, to be raised mainly from South East Asia and Europe, would be utilised to meet the needs of Indian companies and strengthen the 21 overseas branches proposed to be opened in due course, he added.

He, however, declined to name the financial institutions from which the bank was going to raise the amount by way of Upper tier two and hybrid tier one issues.

To a question, Mr Rao said the bank had enough opportunity to raise additional capital if needed and it was not necessarily through the follow on issue. It had already raised Rs 1,075 crore in two tranches earlier, he pointed out.

Giving details of the Q2 results, Mr Rao said the bank posted a net profit of Rs 361.77 crore. The profit during the first half of the current financial year was Rs 553 crore as against Rs 493 crore in the corresponding period last year. The net Non Performing Asset of the bank further declined from 1.46 per cent in September 2005 to 0.96 per cent in September 2006.

He said the bank's global business clocked a 21 per cent growth year-on-year to reach Rs 204,692 crore, comprising Rs 122,121 crore under deposits and Rs 82,571 crore under advances. The bank had set a target of 18.74 per cent growth in global business during 2006-07 to reach Rs 233,000 crore by March 2007, comprising Rs 138,000 crore under deposits and Rs 95,000 crore under advances.

Mr Rao said the bank also planned to form joint ventures in insurance and mutual fund business during the current fiscal in strategic alliance with domestic and international majors. The two separate entities would be formalised during the current quarter as talks with partners were in an advanced stage.

He said the bank was in the process of implementing varied strategies in 1,400 villages across the country for 100 per cent financial inclusion.

UNI SR GD TS1741