The Hindu : Business : Karnataka Bank to issue shares to IFC

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Friday, Nov 02, 2007
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Karnataka Bank to issue shares to IFC

Special Correspondent

Posts Rs. 112 cr. net profit in first half; gross income increases by 25 p.c.

BANGALORE: Karnataka Bank’s share holders on Wednesday approved the proposal to issue of 4.99 per cent of the bank’s equity shares to Washington-based International Finance Corporation (IFC), an arm of the World Bank.

At an extraordinary general meeting, the members approved the issue of shares on a preferential basis. The bank’s Chairman and Chief Executive Officer, Ananthakrishna, announced in the meeting that the shares would be issued at a price of Rs. 225 per share after obtaining Reserve Bank of India’s permission.

He said IFC would also subscribe to the bank’s Upper Tier-2 bonds to the extent of $10 million. With the issue of these shares and bonds, the bank’s capital to risk weighted assets ratio would improve significantly.

The bank has posted a net profit of Rs. 111.93 crore for the half year ended September 30, 2007, against Rs. 96.39 crore in the corresponding period last year, registering an increase of 16 per cent.

For the second quarter, the net profit is Rs. 60.14 crore (Rs. 46.55 crore), according to Mr. Ananthakrishna. He said the quarterly profit excluded the net profit of Rs. 13.06 crore from the sale of shares of Bharat Overseas Bank.

Gross income of the bank for the half year rose from Rs. 674.64 crore to Rs. 843.35 crore, up 25 per cent.

The operating surplus increased from Rs. 162.25 crore to Rs. 194.58 crore. Net interest income has increased to Rs. 235.01 crore from Rs. 185.96 crore.

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