Bangalore-based Syndicate Bank is planning to raise $ 350 million from the overseas bond market in the next 15 days, according to its executive director M Anjaneya Prasad.
“We are hitting the bond market as we are keen to tap cheaper funds,” he said on Friday. The bank would be issuing medium term notes (MTN) at around 4.5 per cent rate of interest.
The board of directors had earlier approved the bank’s proposal to raise up to $ 2 billion through MTN in overseas market for fund requirements of the London branch.
It is expected to appoint an adviser to the issue in a couple of days and begin road shows in Singapore, UK and a few other countries immediately thereafter.
The bank has just one overseas branch at London that saw a growth of 29 per cent in advances at Rs 32,506 crore as at March 2014. Prasad said they were going to file applications in the next quarter to start four more overseas branches across the globe.
On the domestic front, the Government of India, which holds a little over 67 per cent equity in the bank, has infused Rs 200 crore capital last year. The bank has indicated a requirement of Rs 1,500 crore in Tier 1 and Rs 1100 crore in Tier 2 capital but is waiting for clarity on credit growth.
It is also planning to set up a separate vertical for recovery of loans under the Securitisation Act, according to Prasad. In the last fiscal, Syndicate Bank had slipped on the profitability front while the gross non performing assets (NPAs) remained high at Rs 4,600 crore in addition to the restructuring of over Rs 3,700 crore debt.
Prasad said they had targeted to bring down the gross NPA ratio to 2 per cent by March 2015 from the present 2.62 per cent level.