Indian Overseas Bank plans to raise $500 million through Medium Term Notes

Public sector Indian Overseas Bank, plans to raise funds of about $500 million through Medium Term Notes (MTN) this year, a bank official said.

The bank has reported a 21.76 per cent jump in its net profit for the fourth quarter ended March 31 at Rs 528.81 crore.

"In the current year, when the market looks conducive, we will be looking to raise $500 million..," IOB Chairman and Managing Director M Narendra told reporters here.

An MTN is a debt note that usually matures (paid back) in 5-10 years. They can be issued on a fixed or floating coupon basis.

The bank last year had raised similar funds for its overseas operations, Narendra said, adding, businesses in Singapore and Hong Kong have grown in particular.

About their financial results, Narendra said the total income in the January-March quarter rose to Rs 5,415.09 crore as against Rs 3,916.58 crore during the same period of previous fiscal.

The net profit for the year ended March 31 stood at Rs 1,050.13 crore. Total income stood at Rs 19,578.13 crore as against Rs 13,326.56 crore registered during the same period last financial year.

For the full year, the total business grew by 24 per cent to Rs 3,21,707 crore from Rs 2,59,020 crore, he added.

He further said that for this fiscal, the company has planned to achieve total business of Rs 3,85,000 crore to Rs 4,00,000 lakh crore.

"The board of directors have recommended a dividend of 45 per cent for the financial year ending March 31, 2012," Narendra said.

Observing that some sectors like agricultural, SMEs and rural areas offer potential for growth, he said they would tap these areas during this financial year.

The banks' gold loan exposure for fiscal 2011-12 stood at Rs 550 crore, Narendra said, adding, for this year they have set a target of reaching Rs 5,000 crore.

IOB currently has 2,369 branches and has about 1,443 ATM networks across the country. The bank would recruit about 3,500 people in the coming year, Narendra said.

Source: EconomicTimes