The bank’s provision coverage ratio remains healthy at 72.6 per cent compared with the minimum of 70 per cent prescribed under PCA, the private lender said, adding that the bank has continued its focus on capital-light loans.
The bank’s statement came as shareholders on Friday voted out seven directors including both its promoters in what is being seen as a dramatic strike against persistent bad governance and mismanagement.
LVB’s newly appointed CEO S Sundar was also voted out with the shareholders rejecting his appointment.
“Based on voting results of the 93rd Annual General Meeting, the reappointment of 7 directors was not approved. However, the bank continues to have a fully functional Board of Directors including 3 independent directors,” it said.
The stock, which fell 5.72 per cent to hit a low of Rs 18.10 in early trade, erased losses and was up 0.78 per cent at the time of writing this report.
Here’s what the bank told stock exchanges:
Continuity of comfortable liquidity position
The bank said its liquidity position as on September 27 was comfortable, with liquidity coverage ratio (LCR) in excess of 250 per cent i.e. about 262 per cent against minimum 100 per cent required by RBI.
“Hence, the bank does not have any asset-liability mismatch and is successfully fulfilling its commitments to deposit-holders, bond-holders, account-holders and creditors,” the bank said.
Continuity of operations as usual
The bank said it continues to enforce cost reduction measures for both direct and indirect costs. The bank’s provision coverage ratio remains healthy at 72.6 per cent, against a minimum of 70 per cent prescribed under PCA.
All the ATMs of the bank are migrated to Opex model with the highest uptime to serve its customers as well as all banks.
“Further, besides existing business, the bank will continue its focus on capital-light loans like gold loans, government-guaranteed loans to optimise profitability without straining capital funds. And Tamil Nadu continues to be the dominant contributor of business for the bank,” it said.
Continuity of services to customers
The bank’s extensive bouquet of digital products, “DigiGo” and others, the network of 566 branches, 5 extension counters, 918 ATMs in 19 states and 1 union territory continues to function, as usual, LVB told BSE.
Continuity of functioning of interim management
LVB said that all the existing employees of the bank will continue to be in full service as usual.
“Hence, the employees of the bank in their respective functions and capacities, remain ever committed as always, to serve you. Till a new managing director is appointed, the existing senior management team along with the board of directors will discharge the day-to-day affairs of the bank as usual,” the private lender said.
LVB said it will announce the Interim management at the soonest.
The bank said its total capital adequacy ratio (CAR) as per Basel Ill guidelines, was at 0.17 per cent as of June 30 and thus it is in immediate need of capital infusion.
It’s shareholders have approved for an increase of the authorized share capital of the bank from Rs 650 crore to Rs 1000 crore, which is subject to RBl’s approval.
The bank said it will continue the process of considering and evaluating the proposed amalgamation of Clix Capital Services, Clix Finance and Clix Housing Finance with the bank.
“Additionally, to strengthen the Bank’s capital, the shareholders have approved resolution authorizing the Bank to undertake capital raising as FPO, rights issue, QIP or other available routes to raise capital,” it said.