With the intention to keep pace with expansion in its lending business, Allahabad Bank has decided to raise around Rs 19 billion from the bond market in fiscal year 2008-09.

The bank can raise Rs 1900 million through a range of instruments including lower Tier II bonds, upper Tier II bonds and non-cumulative perpetual debts.

According to the bank statement, it will raise 7 billion by selling lower Tier II bonds, Rs 6 billion by issuing upper Tier II bonds and Rs 6 billion by way of perpetual debt issues.

The funds raised via bond issues would assist the bank in preserving its capital adequacy ratio (CAR) at around 12%, a level that the bank management has kept as its internal target. At the end of December 2007, its CAR was at a comfortable 12.84%.

The bank, which is slated review its financial results on May 3, is likely to report a around 25% growth in bottom line for 2007-08 as against its last fiscal year’s net profit of Rs 750 crore.

For the nine months (April-December 2007), the bank has already posted a net profit of Rs 805 crore, exceeding the net profit figure for the whole 2006-07. Banking analysts also anticipate the banking institution to report more than 40% growth in operating profit over Rs 1,100 crore in 2006-07.

The shares of the bank, on Tuesday, gained 1.39% to end at Rs 83.85 on the Bombay Stock Exchange (BSE). The total volume of shares traded was 187,022.