Public sector lender Syndicate Bank is hopeful of opening full-fledged overseas branches in Dubai and South Africa next year. So far, the bank has been managing its overseas business from its branch in London, which was set up in 1977.
“We have customers in the UAE, Australia, Singapore and the US,” Syndicate Bank executive director TK Srivastava told FE. The bank has already applied to the Reserve Bank of India (RBI) seeking permission to open branches in Hong Kong, South Africa, China and the UAE.
Srivastava said the bank is hopeful of getting the necessary approvals from RBI by March. “We target to open the overseas branches next year. It takes some time to get the regulatory approvals in the respective countries. Further, it takes 2-3 months to set up infrastructure for new international branches,” said.
“I am hopeful we will get regulatory approvals from the UAE and South Africa for setting up full-fledged bank branches in three to four months,” the executive director said.
Srivastava, however, said it may be difficult to get the permission to set up a full-fledged branch in China. “If we get the permission, it is okay, else we will open our representative office,” he said.
On the money-raising plan, the official said the lender may go to the market before March to raise Rs 500-1,000 crore by issuing Tier-I bonds.
The bank had earlier obtained board’s approval to raise additional tier-I bonds of Rs 1,000 crore and tier-II bonds of Rs 1,150 crore.
“We have sought permission from the ministry of finance for issuing the Tier-I bonds as market conditions are favourable. We may go to the market before March. The amount will depend on the pricing that we get. It would be between Rs 500 crore and Rs 1,000 crore,” said Srivastava.
Syndicate Bank this month raised Tier-II capital of Rs 750 crore through a bond offering to strengthen its capital base under Basel-III requirement. Its capital adequacy ratio under Basel-III fell to 10.42% for the second quarter ended September 2014, from 11.58% in the same quarter last year.
The lender also expects it would likely get the permission from the government for infusing fresh capital of Rs 1,100 crore through QIP before March.
On stressed asset, Srivastava said he was hopeful that at the end of the current fiscal the bank would be able to bring its net NPA ratio down from the current level.