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UBI to tap market

Calcutta, Aug. 3: United Bank of India (UBI), the city-based public sector lender, is planning to launch a follow-on public offer when the stock market sentiment improves.

The bank, whose tier I capital stands at 8.70 per cent, will require cash infusion.

Banks will have to maintain a capital adequacy of 7 per cent in terms of core capital from January 1, 2013, and another 2.5 per cent in terms of conservation buffer, taking the total tier I capital requirement to 9.5 per cent.

“Given a 20 per cent growth in total business and the resultant plough-back of profits, the current level of capital adequacy will suffice to comply with the Basel III norms for the next two years. However, we’ll need capital infusion and the matter has been discussed at the board meeting today,” chairman and managing director Bhaskar Sen said today.

He said the board discussed all options, including a follow-on public issue, rights issue and a qualified institutional placement of equity shares.

The bank today reported a 31.29 per cent growth in net profit at Rs 173.89 crore for the quarter ended June 30.

The profit rise came on the back of a 20.1 per cent increase in net interest income at Rs 683.75 crore and a 26.75 per cent surge in fee income.

The bank witnessed a 19.8 per cent growth in advances, which helped interest income grow 24.2 per cent. Operating profits rose 30.9 per cent to Rs 546.10 crore. However, UBI experienced pressure on its asset quality as fresh slippage increased to Rs 121 crore from Rs 20 crore a year ago.

 
 
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