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City Union Bank plans to raise Rs.1,000 crore

Chennai, May 26 (IANS) Private sector City Union Bank has started discussions with institutional investors to raise Rs.1,000 crore for its business growth, a top bank official said Wednesday.

‘As per our plans we need around Rs.1,000 crore incremental capital over the next two or three years. We are in discussion with various institutional investors. We will go with the investors whose risk appetite is similar to ours,’ Executive Director N. Kamakoti told reporters here.

He said the bank will get the shareholders approval for the issue at the ensuing annual general meeting.

According to him, the bank is projecting a total business of Rs.22,000 crore this fiscal (deposits Rs.13,250 crore and advances Rs.8,750 crore) and will be opening 56 new branches taking the total branch network to 278.

‘Two-thirds of the new branches will be in Tamil Nadu and the balance will be spread across the country,’ he added.

The Kumbakonam-based bank closed the fiscal 2009-10 with a total income and net profit of Rs.1,100 crore and Rs.152.76 crore, respectively, as against Rs.928 crore and Rs.122.13 crore earned the previous year.

According to Kamakoti, the net interest income last year went up by 14.66 percent to Rs.278.14 crore. The non-interest income stood at Rs.143.50 crore last year showing a growth of 16.03 percent over that of the previous year’s figure.

The bank’s deposits stood at Rs.10,285 crore and advances at Rs.6,833 crore last year as against Rs.8,207 crore and Rs.5,645 crore, respectively, during 2008-09.

Kamakoti said the bank’s gross non performing asset (GNPA) stood at 1.36 percent of the advances at the end of last fiscal down from 1.80 percent the previous year.

‘The net NPA for last year was 0.58 percent down from 1.08 percent the previous fiscal,’ he said.

He said the bank’s total investment portfolio at the end of March 2010 stood at Rs.3,210 crore and the investments in equities stood at Rs.16 crore against a permitted exposure of Rs.50 crore.

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