Public RelationsIOB plans venture capital business
State-owned Indian Overseas Bank (IOB) is planning to foray into the venture capital business.
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The bank had earmarked about Rs 150 crore as initial corpus for the venture to be invested in phases, said SA Bhat, chairman and managing director, IOB.
“We may either float a new entity for this purpose with some joint venture partner or participate in one of the existing funds as a core investor,” said Bhat after a function in Kolkata on Saturday.
To maintain a credit growth of at least 20 per cent and a capital adequacy ratio of 12 per cent over the next three years, the bank has sought about Rs 1,000 crore in capitalisation from the government.
“We have submitted a proposal for raising Rs 1,000 crore in the next financial year, either through preferential capital or a follow-on public offer,” he said.
Recently, the bank raised Rs 1,000 crore by way of upper Tier-II and lower Tier-II bonds.
The bank has set a credit and deposit growth target of 20 per cent each for the current financial year.
“So far, both deposits and credit growth in the bank have been nearly 18 per cent on a year-on-year basis. I am certain to be able to achieve the target as with the start of the busy season, credit growth will pick up further,” he said.
Also, the bank would focus more on recovery of non-performing assets (NPAs), he said.
“Our NPAs have been high and went up further in June by Rs 300 crore due to the takeover of Shree Suvarna Sahakari Bank. However, we are focusing on recovery and are hopeful of bringing down NPAs to a comfortable level soon,” he said.
The bank’s net interest margin (NIM) at present is about 2.84 per cent. It plans to achieve an NIM of about 2.90 per cent by the end of this year.