May 25, 2017 / 8:19 AM / 4 months ago

BRIEF-IDBI Bank plans to raise additional capital in medium term

May 25 (Reuters) - Idbi Bank Ltd:

* Says is planning to raise additional capital in medium term

* Says bank will look at reducing its operational cost and sell non-core assets over a period of time

* Says bank has already initiated process for reducing operational costs, selling non-core assets Source text : [IDBI Bank has crafted a comprehensive turnaround strategy, with a focus on augmenting the capital base and recovery from NPAs. Aggressive recovery and prevention of further slippages is a priority area for IDBI Bank. Given the stress in the corporate sector, the bank will restrict growth in the corporate loan book and focus on increasing retail and priority sector asset base. This will help the bank to reduce risk weighted assets and improve CAR in the short term. The bank is also planning to raise additional capital in the medium term. It has received a capital infusion of Rs.1900 crore through the Government of India’s subscription to its preferential share allotment earlier this year, which enhanced its Common Equity Tier 1 Capital. Furthermore, Life Insurance Corporation of India has also subscribed to the Bank’s preferential equity issue. Additionally, CAR would be improved through sale of non-core assets, continued GoI support and churning of corporate loan book to reduce risk weight of the portfolio. The bank will look at reducing its operational cost and sell non-core assets over a period of time. The exact schedule and quantum of such a sale will depend on market conditions and the Bank has already initiated the process.]

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