UCO Bank to shore up equity base

Kolkata: UCO Bank is considering several options to restructure its capital base. The shareholders have authorised the bank to raise up to Rs 625 crore through Perpetual Non-Cumulative Preference Shares.

The bank will also consider other routes to strengthen equity base including follow-on offerings (FPO) and qualified institutional placements as and when specific approvals from the Government are obtained, S.K Goel, Chairman and Managing Director, UCO Bank, said at a press conference here today.

“Even if approvals are obtained, there is no point going for an FPO at this point, looking at the volatile market conditions,” he said. “Our shareholders have authorised, at an EGM to raise Rs 300-325 crore preferably before March 31. This will add to the bank’s tier-I capital and will raise its equity base,” he said. The balance Rs 300 crore will be raised later by allotment to the Government, he said.

The decision to convert Rs 300 crore equity shares to preferential shares is pending with the Government, he added.

The total amount to be received by UCO Bank under the loan waiver scheme announced in the Union Budget is estimated to be Rs 900 crore, Goel said. Currently, the agricultural NPA of the bank is Rs 308 crore and the provision in this regards is Rs 117 crore, he added.

The bank had set a profit target of Rs 380 crore this fiscal, which will be surpassed by over two times, he said. The total business is expected to be Rs 1,30,000 crore. The bank had recorded a total business of Rs 1,22,262 crore as on December 31, 2007.

At the EGM today, Suresh Chand Gupta and Ramniwas Jain were elected shareholder directors to the bank’s board.