Bank of India raises $85 million in Tier I capital

Mumbai: Bank of India has raised $85 million by way of Innovative Perceptual Debt Instruments (IPDI) with a call option after 10 years to augment the bank's Tier-I capital requirements.

The instruments would be listed at the Singapore Stock Exchange, Bank of India informed the BSE.

The board of directors of the bank, at its meeting held on January 22, had approved an increase in Tier I capital by issuing Innovative Perpetual Debt Instruments (IPDI) - Series I to the tune of Rs 800 crore in domestic currency and / or partly in foreign currency up to $85 million.

The board had also approved issue of upper Tier II capital bonds to the tune of Rs 1,200 crore on a private placement basis at an appropriate time.

The Bank has posted a net profit of Rs 254.87 crore for the quarter ended December 31, 2006 as compared to Rs 143.10 crore for the quarter ended December 31, 2005. Total Income has increased to Rs 2,641 crore from Rs 2,063 crore.

Bank of India, meanwhile, announced that it has signed a formal memorandum of understanding (MoU) on December 21, 2006 with Dai Ichi Mutual Life Insurance Company and Union Bank of India for forming an insurance joint venture.

The bank will hold 51 per cent of the initial subscribed and paid up capital, Dai Ichi Mutual Life Insurance Company will hold 26 per cent and Union Bank of India will hold 23 per cent capital of the said venture.

Bank of India has also entered into an agreement to acquire 76 per cent stake in PT Bank Swadesi Tbk, of Indonesia on December 11, 2006.

The acquisition will be completed after obtaining necessary approval / confirmations from Bank Indonesia and capital market regulators in Indonesia. Established in 1906 in Mumbai by a group of influential businessmen, Bank of India was nationalised in 1969. Starting out with a single branch, it grew to a network of 2,644 branches across India, and 24 branches or representative offices in foreign centres, including London, New York, Paris, Tokyo, Hong Kong and Singapore. Its latest foreign branch in Antwerp will specialise in providing services to the diamond trade.