The Hindu Business Line : UCO Bank looking at merger options

UCO Bank is seeking to merge with a bank that has a presence in southern and western parts of India. The bank has asked consultancy firm AT Kearney to carry out a preliminary study to perform a SWOT (strength, weakness, opportunity, threat) analysis.

"We are looking at options for a merger with other entities," said Mr V.P. Shetty, Chairman and Managing Director, UCO Bank.

He was speaking at the sidelines of a press conference organised to announce a tie-up between UTI Mutual Fund and UCO Bank for distribution of UTI MF schemes.

He said that the bank was looking at additional earnings of Rs 40 crore from the mutual fund distribution business.

The bank is also planning to raise Tier II capital, aggregating nearly Rs 200 crore-250 crore, which will have a tenor between 7-10 years. The bank will raise this capital when the interest rate scenario has stabilised, he said.

Mr Shetty added that the bank did not have any plans to go for a public issue in the near future, with their equity capital at Rs 799 crore, but they would look at restructuring this to preferential capital with low coupon rate.

The bank might set up about 200-300 branches in rural and semi urban areas during the next 12 months. UCO bank has also allocated Rs 470 crore for five years for their core banking solution (CBS) initiative.

Mr M. Damodaran, Chairman and Managing Director, UTI AMC, said, "IDBI Bank is likely to expand to 200-250 branches by Mach 31, 2005.

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