IDBI Bank to raise $1.15 bn via bonds; Q2 net soars 69%

MUMBAI: Public sector lender IDBI Bank, which reported a robust 69 per cent rise in profit at Rs 429 crore for the September quarter on cheaper funds and higher fee-based income, said it will raise $1.15 billion from bonds in the rest of the fiscal to oil its need for capital.

"We will be raising $1,150 million more from bonds through the rest of the fiscal. We have already raised $350 million this year," chairman and managing director RM Malla told newspersons in Mumbai while announcing the quarterly results.

On the medium term notes (MTN) programme, Malla said, the bank would be issuing these bonds at 4.75 per cent per annum and they will have a maturity of 5.5 years. The entire $1.5-billion programme will be listed on the Singapore Stock Exchange. The bank has already raised $350 million through its Dubai branch.

On Q2 numbers, Malla said, "our net interest margin (NIM) more than doubled to 2.27 per cent during the quarter from 1.05 per cent, helping us report better profit. This is the first time that we have crossed the 2 per cent mark."

Stating that he is hopeful of clocking high double- digit profit growth for the fiscal, Malla said he is hopeful of achieving 18-20 per cent growth in advances as he expects corporate demand to considerably pick up in the coming months.

"Going forward, we would be focusing on bringing down our cost of funds by wooing more and more Casa customers. Our focus will be less on bulk deposits. Since we waived all the charges on our Casa accounts from September 1, our number of customers have more than doubled from the August figures," Malla said.