Lakshmi Vilas Bank venturing into housing finance biz

Lakshmi Vilas Bank, a private sector lender is planning to venture into housing finance business by floating a subsidiary housing finance company.

To float equity shares of up to 40 per cent of the present issued capital, bank will be taking approval from the shareholders’. The bank is also looking for a qualified institutional placement, a global depository receipts or an American depository receipt issue, or a follow-on public offer.

Lakshmi Vilas Bank Managing Director & CEO K S R Anjaneyulu said, “The housing finance space offers immense scope. We need focused and concerted efforts in this business so as to reap the benefits from this huge potential market. That is why the bank’s board has decided to float a new subsidiary to undertake the housing finance business.”

Besides this, bank is also planning to issue equity stock options of up to 5 million to its eligible employees and directors under the stock option scheme.

As on March 31, as per Basal-II norms bank capital adequacy ratio stood at 14.82 per cent.

Anjaneyulu said the bank need more capital to meet its expansion plans. He added, “That is why after raising funds through a rights issue in December 2009, the bank plans to raise further share capital in the current financial year.”

According to records, as on March 31, banks’ share capital amounted to Rs 97.51 crore. During 2009-10 there was a growth of 23.28 per cent from Rs 7,631 crore to Rs 9,075 crore in its total deposits however its net advances accounted to Rs 6,277 crore, registering a growth of 19.88 per cent from the previous year advances of Rs 5,236 crore.