DCB Bank to raise up to Rs400 crore in H2 of next fiscal year

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Mumbai: Small-sized private sector lender DCB Bank is targeting to raise up to Rs400 crore in the second half of the next financial year to augment its capital, a top official has said.

“We will raise Rs300-400 crore of capital after September 2017. That is our current thinking,” managing director and chief executive Murali Natrajan told PTI.

He said the bank is comfortably placed for its capital buffers to take care of growth at present, but will have to evaluate it later.

The bank’s promoters Aga Khan Fund for Economic Development and Platinum Jubilee Investments will get its holding in the bank down to 15% from the present 16.21% during the next financial year, he said.

The promoter group will most likely subscribe to the required number of shares to keep its holding at 15%, which is what the regulator is comfortable with, he added.

Its capital adequacy ratio was at 13.33% with the core tier-I was at 11.39% as of December end. Its net advances grew 24% in the December quarter.

Natrajan said an infusion of up to Rs400 crore will help adding up to 2 percentage points to the core capital buffer and the tier-I will go up to 13% after the infusion.

When asked about the necessary approvals for the capital raising exercise, Natrajan said it is too early to seek those. He said the bank is also in early discussions to explore raising funds through the AT-1 (additional tier-I), which helps bolster the core capital levels under the Basel- III capital framework.

Natrajan said the bank had raised Rs150 crore in tier-II bonds in November 2016 which can help it in future fund raising exercises.