India-based lender Bank of Baroda is reportedly planning to raise INR55bn ($765.31m) capital through the issuance of bonds and employee stock option plan (ESOP).
The bank will raise INR40bn through bonds and the remaining INR15bn via ESOP, reported Business Standard.
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The bonds are expected to be floated by the end of this month or in the first week of next month to raise tier II/tier I capital.
Bank of Baroda CEO P S Jayakumar was quoted by the news agency as saying: “We are expecting to complete the entire capital raising exercise by the end of September.”
The bank is said to have notified in a regulatory filing about an upcoming meeting of its capital raising committee to discuss regarding the bond issuance.
In a statement about the loans portfolio in the domestic banking sector, Jayakumar noted: “The non-performing assets (NPA) cycle is also reversing after hitting its peak.”
The merger of Bank of Baroda with Dena Bank and Vijaya Bank has become effective in April this year. The merged entity will reportedly have more than 9,500 branches, 13,400 ATMs and 120 million clients.
This merger made Bank of Baroda the second-largest public sector lender in India.
Later in May, the bank was reported to plan rationalisation of 800-900 branches following the three-way consolidation. Branches of the three banks at the same location will be rationalised, according to a PTI report.
