Ahmedabad: Syndicate Bank on Saturday said it would raise USD 500 million to fund its London operations through the medium term note (MTN) bond issue.
"The bank has board approval for a USD 500 million MTN bond issue. It could hit the overseas market between May and December this year, depending on the demand for credit," Chairman and managing director of Syndicate Bank M G Sanghvi told reporters here.
The funds raised would be utilised for expanding the credit operations of the bank's London branch, he said.
A medium-term note (MTN) is a debt security that usually matures in 5-10 years.
The bank's London branch had reported total business of around Rs 43,000 crore by March 2013, as per provisional estimates.
"As per provisional estimates, the branch's total advances are Rs 25,134 crore, while deposits are of Rs 18,301 crore," Sanghvi said.
The PSU bank, had raised USD 500 million last year(2012), the second tranche under bank's MTN programme of USD 1 billion. An equal sum was raised by the bank in 2011 through the same bond route.
Meanwhile, he said that the bank is likely to close this year with a total business of Rs 3.30 lakh crore, including global deposits of over Rs 1.64 lakh crore and global advances of over Rs 1.45 lakh crore by March 2013.
The bank's net NPA in the first nine months (upto December 2012) of the fiscal marginally declined to 0.85 percent from 0.86 percent levels, while its capital adequacy ratio stood below 12 percent.
The bank targetting to be Basel-III guidelines complaint by 2018, has sought capital infusion of Rs 1,400 crore from the Union Government.
"We had applied for capital infusion to the government last year, and expect some funds infusion this year as provision has been made in the Union budget," Sanghvi said.
Rating agency, Moody had downgraded the bank reportedly on account of slippages, but had stated that the outlook was stable.
The global local currency deposit rating of Syndicate bank was lowered to Baa3/P-3 from Baa2/P-2.
"I have spoken to Moody on the downgrade, in the backdrop of our better quater-to-quater performance, and they have assured to (take a) relook at the rating," Sanghvi said.