The Thrissur-headquartered bank will seek to expand its secured lending portfolio while bringing down the share of unsecured loans as a risk mitigation strategy.
The lender, which has been facing net losses for the past few consecutive quarters, saw its capital adequacy ratio (CAR) drop to 22.7% at the end of June from 23.5% a year ago, while tier-1 capital fell to 18.4% from 20.1%.
The CAR, however, remained well above the minimum stipulated 15%. Yet, the bank is planning to raise capital to fund its growth plans.
The bank’s board will meet on September 20 to consider the size of the fundraising as well as the instrument and modalities.
Managing director K Paul Thomas declined to comment on the likely issue size.Last month, the bank’s chief financial officer Gireesh CP had informed analysts about the fundraising. “Going forward, we have got aggressive plans for increasing the asset book which requires capital,” he had said.ESAF Small Finance Bank’s gross loan portfolio stood at ₹19,809 crore at the end of June, reflecting a mere 0.7% rise year-on-year.
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