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Lord Krishna Bank plans rights issue

Abhrajit Gangopadhyay

BANGALORE, Nov. 3

LORD Krishna Bank plans to go in for a Rs 36-crore rights issue of equity shares in the current financial year in a bid to boost its net worth to Rs 100 crore from the current Rs 59.9 crore, according to its Executive Director, Mr V.K. Gupta.

The issue is likely to open in January. The bank has a paid-up equity of Rs 26.85 crore. It further plans to raise tier II capital in the financial year 2002-03 to shore up its capital adequacy ratio (CAR). Currently, the bank has a CAR of 13.9 per cent.

Mr Gupta said Lord Krishna Bank is also scouting for acquisition targets. However, it is yet to identify any prospective target and has not fixed a time-frame to close any deal.

Commenting on the talks of Lord Krishna Bank as a potential takeover target for large nationalised banks, Mr Gupta said, ``We are opposed to any merger proposals from other banks...we will not sell off.''

Focussing on the high-margins retail banking business, Lord Krishna Bank expects to report a net profit topping Rs 10 crore for the current fiscal, up 100 per cent from Rs 5 crore a year ago.

Thrust on housing loans, rent securitisation and loans against gold deposit would help the bank report a total income close to Rs 200 crore in the current fiscal, up from Rs 144.48 crore a year ago. The bank recently cut its interest rates on gold deposi ts by 100 basis points to 15 per cent, Mr Gupta said. It also plans to sell non-life insurance products across its branches in the next fiscal and discussions with insurance firms to this regards are on. The bank also plans to open 12 new branches in the current financial year, taking its branch network to 99.