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Neelam Naik made post

Why is Bank of Baroda planning to raise Rs.2000 crore of capital?

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Priyanka N answered.
1 month ago

Bank of Baroda proposes to mop up Rs.2000 crore by issuing bonds to finance its growth plans. This will be done through the issuance of Basel-III Compliant Additional Tier-I Bonds. BOB had just shown a sharp turnaround in the latest quarter reporting a net profit of Rs.507 crore compared to loss of Rs.991 crore in the last quarter of the previous year.

BOB is among the clutch of PSU banks that are looking to raise funds to shore up their capital. Tier-I bonds are quasi equity and hence they quality as equity capital for the purpose of capital adequacy. Banks like BOB are looking at a comfort zone in their balance sheets to handle probable incidence of defaults and a liquidity crunch when moratorium is lifted.