Indian Overseas Bank on Wednesday announced that its public offering of 10 crore (100 million) equity shares of Rs 10 each for cash at a permium of Rs 14 per share -- aggregating Rs 240 crore (Rs 2.40 billion) -- will open for subscription on September 5.

The equity issue will remain open for subscription for a week after the date of its opening, J K Gupta, general manager, IOB, told reporters in Chandigarh.

Gupta said that the proceeds of the equity will be utilised to augment the capital base of the bank to help fund future business growth.

"This public offering will increase the bank's equity capital to Rs 544.8 crore (Rs 5.45 billion) from Rs 444.8 crore (Rs 4.45 billion) as on March 31, 2003. After this issue, the holding of the government will come down to 61.23 per cent from 75 per cent," he said.

He said the bank's current capital adequacy ratio is 11.30 per cent as on March 31 this year against 10.82 per cent as on March 31 last year.

"The bank paid a dividend of 16 per cent for the year ended March 31, 2003 as against 12 per cent for year ended March 31, 2002."

Gupta said that over the years, the bank, which was established in year 1937, had maintained a consistently high growth rate.

"The bank's business increased by 15.64 per cent to Rs 55,129.86 crore (Rs 551.29 billion) in the last financial year from Rs 41,223.49 crore (Rs 412.23 billion) in the financial year 2001. The total deposits of the bank grew by 15.70 per cent to Rs 36,698.59 crore (Rs 366.98 billion) as on March 31 this year from Rs 27,414.16 crore (Rs 274.14 billion) as on March 31, 2001. The net profit increased from Rs 416.10 crore (Rs 4.16 billion) in 2002-03 from Rs 230.21 crore (Rs 2.30 billion) in year 2001-02," he said.

Gupta said that the non performing assets of the bank had come down to 5.23 per cent of its net advances as on March end this year, from 7.01 per cent as on March 31, 2001.

He said the thrust area of the bank would be to further bring down the NPAs to 5 per cent and decrease the average cost of deposits.

"We plan to add 100 ATMs during the current financial year," he said.