Syndicate Bank seeks shareholders nod for FPO

Mumbai, May 25 | Updated: May 26 2007, 05:32am hrs
Public sector lender Syndicate Bank is seeking shareholders' approval for the proposed Follow-on Public Offer (FPO) of 8 crore shares, to meet Basel-II requirements and expansion plans.

The Manipal-based bank informed the Bombay Stock Exchange that its shareholders would consider the proposal on June 21 at the 8th Annual General Meeting (AGM).

As per the proposed issue, Syndicate Bank would issue up to 8 crore equity shares of Rs 10 each, aggregating to not more than Rs 80 crore, to individuals, companies, FIIs, Financial Institutions, banks, Qualified Institutional Buyers, subject to necessary provisions and approvals. The bank has earlier said, it would use the proceeds to meet the capital requirements under Basel-II guidelines as the bank has the overseas presence. Besides, it would also be utilised for the expansion activity.

According to the RBI's guideline, banks with overseas branch are expected to comply with Basel-II guidelines for operational risk by the end of March 2008. The price for the issue would be determined later, subject to necessary approvals from the government, Reserve Bank and other statutory bodies. Currently, the government holds 66.47% stake in the lender, whose CAR stood at 11.74% as of 31st March. The Tier I ratio was placed at 6.24% and the Tier II ratio stood at 5.50% as of March 31. State Bank of India, ICICI Bank, HDFC Bank and Federal Bank have already announced plans to raise capital from the equity offering. Shares of Syndicate Bank were last trading at Rs 77.85, down 0.64% on the BSE.