The Hindu Business Line : Union Bank to raise Rs 1,000 cr via bonds

Out of this, Rs 200 crore will be raised through a perpetual bond issue, Rs 300 crore through an upper Tier-I bond issue and Rs 500 crore through a Tier-II bond issue, said Mr M.V. Nair, Chairman and Managing Director.

The bank has headroom to raise Rs 3,500 crore, he said. This will give it a capital adequacy ratio of over 12 per cent.

A senior official from the bank said it is offering 11.15 per cent interest on its perpetual bond issue, which is expected to close tomorrow.

Mr Nair was speaking on the sidelines of the unveiling of the bank’s new logo.

The cost of changing the signage, for the new logo, across the country, is about Rs 10-12 crore. The bank has also a budget of Rs 75 crore for advertisements in the print and electronic media. The change in the logo is one step towards Union Bank’s mission to become a globally diversified bank and the best Indian bank according to customer perception, by 2012, Mr Nair said.

Insurance venture

The bank’s insurance joint venture with Bank of India and Da-ichi Mutual Life is expected to start operations by December.

“By the fourth quarter of this fiscal we should be able to come out with products,” Mr Nair said.

The mutual fund business, jointly with KBC Asset Management, from Belgium, is likely to begin in about six months, he said.

This year, the bank has plans to open 500 domestic branches and is looking at four additional overseas centres in addition to the three it already has.

The new centres would come up in Australia, Indonesia, UK and Canada.

This year, the bank is targeting 22 per cent growth in advances.

Our Kolkata bureau reports:

Union Bank of India plans to open four retail asset branches in the eastern region this year in order to scale up its retail operations.

The bank has three retail asset branches in the eastern zone in Kolkata, Ranchi and Patna.

“We plan to open four more in Kolkata, Bhubaneshwar, Guwahati and Jharkhand,” said a senior official.

According to Mr S.L. Bansal, General Manager, Union Bank of India, the bank’s retail portfolio in the eastern region has not been growing very well because of some bottlenecks.

However, the retail asset branch has helped the bank to extend more advances in a short span of time.

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