Allahabad Bank planning to raise fresh funds for capital adequacy

State-owned Allahabad Bank will raise an additional Rs 1,800-1,900 crore to shore up capital adequacy, its Managing Director and CEO S S Mallikarjuna Rao said on Tuesday. The Kolkata-based lender had on November 8, in an exchange filing, said the Centre will infuse Rs 3,054 crore as capital in the current fiscal. 

"We will have to raise an additional Rs 1,800-1,900 crore in the capital and we are exploring all options - government help, QIP, and hiving off non-core assets and stake in JVs," Rao said. 

He said the bank hopes to break even in the June quarter of 2019-20, by which time, it also expects to meet the criteria of Reserve Bank of India for relaxing prompt corrective action (PCA) controls. The lender on Tuesday reported a net loss of Rs 1,822.71 crore in the quarter to September. 

Rao said the process for selecting a consultant to evaluate divestment options in Universal Sompo General Insurance Company, in which it holds 30 per cent stake, and in asset reconstruction company ASREC, with a stake of 27 per cent stake, by the end of this fiscal. 

He said Allahabad Bank is looking at the resolution of 17 NCLT cases and a writeback of about Rs 400-450 crore. The bank is rebalancing its assets from high-risk profile to low risk to increase credit headroom. Rao said the lender will close down its Hong Kong branch by March, and the process for that is already underway. 

To a question, the top official of the bank said it has about 10 accounts in beleaguered infrastructure conglomerate IL&FS with an exposure of about Rs 1,200 crore, and all of them were standard, Rao said.

(With inputs from agencies.)