Canara Bank plans to raise Rs 4,000 crore via tier-2 bonds

Synopsis

In a strategic move, Canara Bank will raise ₹4,000 crore through tier-2 bonds by the end of March, aiming to support a promising 13% increase in fiscal year advances. With board approval for a more ambitious fundraising strategy, the bank also plans to reinvest profits to boost its expansion efforts.

Canara Bank plans to raise ₹4,000 crore in tier-2 bonds by the end of March, while it is targeting a 13% growth in advances for the entire fiscal, managing director Hardeep Singh Ahluwalia told ET.

The bank has board approval for raising ₹6,000 crore in tier-2 bonds, while it has decided to exhaust only two-thirds of the limit. The balance capital requirement will be met by ploughing back profits, Ahluwalia said.

In November, the lender raised ₹3,500 crore in additional tier 1 bonds.

"Our board had approved a ₹9,500 crore fundraising plan for the current fiscal. Within the remaining ₹6,000 crore option, we are planning to raise ₹4,000 crore in tier 2 bonds, while ploughing back profit will help in business expansion," Ahluwalia said.

The government appointed him as the interim head of the bank for three months from the beginning of the year as the position became vacant following the superannuation of K Satyanarayana Raju.

The bank earned ₹14,681 crore net profit in the last three quarters of the fiscal.

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