Sunday, August 2, 2009

UCO may float Rs 850-cr follow-on issue, non-life JV

UCO Bank may float an Rs 800-850 crore follow-on issue during the third quarter of the current fiscal. The bank has also decided to float a non-life joint venture (JV) company by September.

“The proposed issue will have a Rs 136 crore face value and if we consider a premium of Rs 50 per share, we may easily be able to raise Rs 800-850 crore during this quarter,” said SK Goel, chairman and managing director, UCO Bank. He was talking to reporters at a press conference to announce the company’s first-quarter results.

Currently, the government holding in UCO Bank is 64%. After the follow-on issue, the government’s holding will come down to 51%. Talking about different possibilities of raising capital, Mr Goel said: “About Rs 750 crore is slated to come from the Centre as part of the recapitalisation fund. Additionally, we have headroom for another Rs 800 crore for tier-II capital.”

On the plans to float a non-life JV, Mr Goel said: “Now that the economy is rebounding, we’ve decided to take the general insurance business plans. A JV is likely to be floated with a foreign insurer by September 2009.” Talking on the first-quarter financials, Mr Goel said: “Operating and net profit for the quarter ended June 2009 are up by 36% and 34% to Rs 310.3 crore and 178.9 crore, respectively. The bank’s total business, including overseas business, grew 26% to Rs 1,68,808 crore during the period under review.”

Total deposits and advances rose 28.37% and 22.71% to Rs 1,00,428 crore and Rs 68,380 crore, respectively.

Investments, on the other hand, rose 37.44% to Rs 32,688 crore. Interest earned for the period rose 26% to Rs 2,331.46 crore. Total income for the bank rose 29% to Rs 2,583.68 crore during the period under review against Rs 1,999.16 crore in the previous corresponding period.

Income from treasury operations for the period was Rs 658.16 crore against Rs 530.64 crore in the previous period. Corporate and wholesale banking during the first quarter was Rs 948.27 crore against Rs 763.05 crore in the previous period. Income from retail banking touched Rs 966.93 crore against Rs 763.05 in the previous corresponding period.

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