Indian Overseas Bank to raise 1,000 crore, says MD

NEW DELHI: Public sector Indian Overseas Bank would look at raising Rs 1,000 crore through qualified institutional placements to sustain the growth in the business, a top official said on Saturday.

The Tamil Nadu-based bank on Saturday said it has posted a 20 per cent rise in net profit to Rs 392 crore for the quarter ending June 2022 helped by a decline in bad loans.

Indian Overseas Bank reported a net profit of Rs 327 crore in the corresponding quarter of the previous year.

''The bank is now looking at its capital front for the year. We may have to go and raise some capital during the year in order to sustain the growth int he business, but overall capital position is quite comfortable'', Indian Overseas Bank Managing Director and CEO Partha Pratim Sengupta told reporters.

''The Board has already decided to raise Rs 1,000 crore maybe under common equity tier. We will be raising it,'' he said, responding to a query. ''I think this Rs 1,000 crore of capital will make our position much more comfortable,'' he said.

Asked on whether Rs 1,000 crore would be adequate to the bank's growth strategy, he replied in the affirmative saying, ''I can say we can comfortably look for the next one-and-a-half years and maybe after that also depending on credit situation.'' ''Our board has planned that we should not be too much aggressive on anything, so it will be a growth on all the segments that is RAM and corporate. The fund-raising will be mainly come from QIP (Qualified Institutional Placement), we are planning for QIP as of now,'' he said.

The bank's total income declined to Rs 5,028 crore in the first quarter of 2022-23 as against Rs 5,607 crore in the same period a year ago.

Sengupta said the provisional coverage ratio continues to be strong and the bank was identifying the stresses well before time and was adequately making provisions.

''Overall, I can say that the bank after one year, it will have a much much stronger balance-sheet and once all the accumulated losses can be wiped out, it will take another couple of years. It will be in a comfortable position and will be in a position to reward its shareholders also,'' he said.