UCO Bank, Vijaya Bank to sell stake to LIC

Two state-owned lenders UCO Bank and Vijaya Bank today said they propose to raise capital of about Rs 412 crore by issuing fresh equities to LIC.

The board has approved the proposal for issue of 3.13 crore shares to Life Insurance Corporation of India (LIC) on preferential basis, UCO Bank said in a filing to the BSE.

At the prevailing market price, the bank would raise about Rs 265 crore by selling stake to the insurer.

Shares of UCO Bank closed at Rs 84.80 a piece, up 0.47 per cent on the BSE.

Meanwhile, Vijaya Bank said it proposes to allot shares worth Rs 147 crore to LIC on preferential basis.

Shares of Vijaya Bank, however, closed at Rs 61.55 a piece, down 1.76 per cent on the BSE.

The fund raising would be subject to the approval of the shareholders and regulatory authorities, they said.

Last fiscal, the bank got capital support of Rs 1,010 crore from the government.

In 2010-11, the government provided capital support to the tune of Rs 20,157 crore to public sector banks.

Source: EconomicTimes