IOB proposal to raise Rs1,200 cr through QIP gets shareholders' nod

Shareholders of the public sector Indian Overseas Bank on Friday approved the bank's proposal to raise Rs1,200 crore through qualified institutional placements (QIP).

The shareholders approved the proposal during the 14th Annual General Meeting of the bank, the Chennai-based public sector lender said in a release.

''...the shareholders approved the proposal for raising of capital by way of QIP up to Rs 1,200 crore, including share premium, subject to regulatory approvals,'' it said.

The board of directors of the bank, which held a meeting on Thursday, had also given approval to raise capital by way of issue of equity shares of Rs10 each at a price determined by SEBI to the union government to the extent of their capital infusion.

IOB has asked the centre to infuse fresh capital into the bank to meet tier I capital under Basel-III norms, which is seen to the extent of Rs3,500 crore for the current financial year.

The board had also accorded permission to issue equity shares of Rs10 each to qualified institutional buyers by way of private placement, up to an extent of not exceeding Rs1,200 crore (including the share premium) out of the shortfall in the tier I capital requirement of Rs3,500 crore assessed by the bank.

IOB had reported a net profit of Rs268.33 crore in the fourth quarter as against Rs58.60 crore for the same quarter last fiscal, staging a revival in its bottomline performance which has been hit by bad assets in the last few quarters.

Total income of the bank during the fourth quarter stood at Rs6,475.93 crore. Net interest income was at Rs1,144.99 crore.

For the whole financial year, the bank had reported a profit of Rs601.74 crore, recording a growth of 6 per cent. The total income for the year increased to Rs24, 853.07 crore, a growth of 10 per cent.

Business grew to Rs4,09,057 crore, recording a growth of 12 per  cent. Deposits grew to Rs2,27,976 crore, marking a growth of 13 per cent.