Karur Vysya Bank is exploring the possibility of issuing shares through qualified institutional placement to augment its capital base.
The bank has informed the BSE that the Board would, after taking into account the financial results for the quarter ended June 2013, explore ways and means to augment the capital base through the QIP route / preferential offer basis.
“The Board has approved raising of Rs 1,000 crore, but this will be in more than one tranche,” said K. Venkataraman, Managing Director.
“The decision will, however, depend on the market condition. It is only an enabling resolution,” he added.
Profit slips
On performance, he said the net profit slipped from Rs 145.95 crore a year ago to Rs 120.30 crore at the end of the first quarter of the current fiscal, mainly on account of higher NPA provisioning. “Huge amounts have gone into NPA. These are mostly weak accounts, marked for exit. Unfortunately, the year has not been good; as it stands, it would only be a disincentive, if these accounts are restructured,” he told Business Line.
Answering a query, he said “these accounts are across sectors including textiles and steel. They are mid-corporate accounts.”
The bank’s topline, however, grew to Rs 1,429.46 crore (Rs 1,109.81 crore).
Its operating profit (before provisions and contingencies) rose to Rs 318.72 crore (Rs 202.68 crore).
Its gross and net NPA at the end of the first quarter stood at 1.51 per cent (1.53 per cent) and 0.50 per cent (0.38 per cent) respectively.
The total business of the bank increased 26.5 per cent to Rs 72,800 crore (Rs 57,571 crore). Deposits grew by 27 per cent to Rs 41,818 crore, while advances increased to Rs 30,982 crore, reflecting a 25.8 per cent growth year-on-year.
As on date, the bank has 554 branches and 1,357 ATMs.
The bank would focus on retail lending and SME advances, he said and added that the home loan pick up was ‘good’.