Syndicate Bank is planning to raise Rs 1,000 crore of lower Tier II bonds during the quarter-ending December 2012. According to Syndicate Bank CMD M S Sanghvi, they are selling these bonds as the bank is eligible for Tier II bonds.
“We expect credit growth to take place. The funds would go into improving our capital adequacy ratio (CAR). The bank is comfortable with its risk-weighted assets of the bank.” This move, to raise Rs 1,000 crore comes close on the heels of the bank raising $500 million through the MTN route to bolster its London operations.
“We did aggressive marketing for raising the funds. We aggressively marketed it in Europe and Asian countries. We gave out the strengths of the Indian banking sector and how Syndicate Bank is growing its net interest income and net interest margin. Our efforts were also helped by the Government of India announcing reforms to allow us to invite investors from abroad to participate in various investment products of the banks,” Sanghvi told Business Standard.
The bank, during the past quarter, reduced its high cost deposits from Rs 23,000 crore to Rs 18,000 crore and is looking forward to seeing a credit growth of a little over 12 per cent and is hoping that the RBI will announce a cut of 0.25 per cent in the CRR.