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Kolkata-based United Bank of India plans to come out with a rights issue to raise Rs 300 crore, early next fiscal.
According to Sanjay Arya, Executive Director, the bank has already received nod from its board of directors for the rights issue.
“ We will soon approach the government and Reserve Bank of India seeking their approval,” Arya told Business Line.
The rights issue could happen by the first half of 2013-14, he said.
Meanwhile, the bank, on Tuesday, received its shareholders’ approval to raise Rs 100-crore worth Tier-I capital by way of preferential allotment to the Union Government by end of this month.
The bank plans to issue 1.37 crore equity shares at a price of Rs 72.95 a share on preferential basis.
“We expect this capital to be pumped in by the end of this month. This will boost our capital adequacy ratio and help fund our growth needs,” he said. The capital adequacy ratio of the bank stood at 11.88 per cent as on December 31. This is likely to go over 12 per cent by March 31, supported by the capital infusion and accruing of profits earned during the fiscal, he pointed out.
United Bank aims to achieve 22 per cent growth in credit in 2013-14. The bank’s credit growth is likely to be 14-15 per cent by the end of this fiscal.
“The economy is showing signs of revival and things are looking better so we expect credit growth to pick up. This capital raising plan will help us achieve our targeted growth in advances,” he said.
shobha.roy@thehindu.co.in
Source: thehindubusinessline
According to Sanjay Arya, Executive Director, the bank has already received nod from its board of directors for the rights issue.
“ We will soon approach the government and Reserve Bank of India seeking their approval,” Arya told Business Line.
The rights issue could happen by the first half of 2013-14, he said.
Meanwhile, the bank, on Tuesday, received its shareholders’ approval to raise Rs 100-crore worth Tier-I capital by way of preferential allotment to the Union Government by end of this month.
The bank plans to issue 1.37 crore equity shares at a price of Rs 72.95 a share on preferential basis.
“We expect this capital to be pumped in by the end of this month. This will boost our capital adequacy ratio and help fund our growth needs,” he said. The capital adequacy ratio of the bank stood at 11.88 per cent as on December 31. This is likely to go over 12 per cent by March 31, supported by the capital infusion and accruing of profits earned during the fiscal, he pointed out.
United Bank aims to achieve 22 per cent growth in credit in 2013-14. The bank’s credit growth is likely to be 14-15 per cent by the end of this fiscal.
“The economy is showing signs of revival and things are looking better so we expect credit growth to pick up. This capital raising plan will help us achieve our targeted growth in advances,” he said.
shobha.roy@thehindu.co.in
Source: thehindubusinessline
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