AU Bank further strengthens its capital adequacy, raises Tier II Capital of INR 500 Crores

Deepthi | Myequity news | Date : 30-11-2018 15:10:00 IST

AU Small Finance Bank has raised Tier II capital of INR 500 crores in the form of Unsecured, Subordinated, Rated, Listed, Redeemable Non-Convertible Bonds through Private Placement basis to further strengthen its Capital Adequacy (CRAR) position.

The aforesaid issue attracted strong interest from diversified base of marquee institutional investor and got fully subscribed for INR 500 crores including the green shoe option of INR 200 Crores. Subscribers to the issue included some of the largest domestic investors viz. Mutual Funds, Banks, Insurance companies and NBFCs. These Non-Convertible Bonds carry a long term rating of “AA-/stable” from both CRISIL Rating and India Rating & Research Private Limited and have a fixed maturity tenure of six and half year.

Earlier this year, Temasek Holdings, an investment arm of Government of Singapore, had committed an equity investment of INR 1000 Crores in AU Bank. Out of which, Temasek has already invested INR 475 Crores in June 2018 and the remaining amount of INR 525 Crores is expected to be invested by / before December 2019.

In accordance with Operating Guidelines for Small Finance Banks, Small Finance Banks are required to maintain a total capital adequacy ratio of 15% with a minimum Tier 1 CRAR ratio of 7.5%. As on 30th September 2018, AU Bank had a total CRAR of ~17.8% with a Tier 1 CRAR of ~17.2% indicating enough cushion for raising Tier II Capital.

Speaking on the development, Mr. Sanjay Agarwal, MD & CEO of the Bank commented that, “The issuance will further strengthen our position both in terms of our healthy Capital Adequacy and long-term resources. In the recent environment, we continue to see strong traction in retail assets and deposits and take this raise as an important milestone. As we tread further, we remain focused on building a differentiated and a customer centric and an inclusive banking franchise over next few years”

About AU Small Finance Bank:

AU Small Finance Bank Limited (AU Bank) is a Fortune India 500 Company. AU Bank happens to be the only scheduled commercial bank originating from Jaipur with ~500 touch points operational across 11 states of North, West and Central India and a team of 12,000+ employees. AU started its journey in the year 1996 as an NBFC, Au Financiers and under the aegis of Reserve Bank of India, for the last two decades, it worked relentlessly as a retail focused, customer centric premier and trusted asset financing NBFC. It touched over a million plus underbanked and unbanked customers, prior to becoming a bank in April 2017.

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