Allahabad Bank may raise Rs1000 crore; delists from CSE

The state-owned Allahabad Bank said that it would will explore the option of raising Rs1,000 crore by September 2009 to strengthen its capital to support growth.

''We may look at raising about Rs1,000 crore this year, whenever the market is conducive, as we did last year,'' chairman and managing director K R Kamath said at the bank's annual general meeting on Monday.

K R Kamath, chairman and managing director, Allahabad Bank''We are not in a hurry to raise capital as we have a comfortable capital adequacy ratio at 13.11 per cent. Nevertheless, we may raise the money to take advantage of the lower interest rate regime,'' Kamath told reporters after the AGM.

''We might also look at a rights issue if things are favourable,'' Kamath he said. However, he ruled out any immediate possibility of a rights issue or dilution of government stake from the current level of 55.43 per cent.

At present, public sector banks are not allowed to reduce government s stake below 51 per cent, and therefore the bank does not have a much elbow room in this regard. ''We can only consider this option once the government allows it,'' Kamath said.

He added that the bank has headroom of Rs2,450 crore for raising capital, including Rs600 crore of tier 1 capital. Another Rs1,850 crore could be mopped up by using bond instruments like IPDI and subordinated bonds, he said.