The Hindu Business Line : UCO Bank plans to raise Tier II capital

UCO Bank has set a target of Rs 1,000 crore of operating profit and Rs 500 crore of net profit for the current fiscal, according to Mr V. Sridar, CMD.In 2004-05, the bank posted an operating profit of Rs 819 crore and net profit of Rs 346 crore.

Addressing shareholders at the company's second annual general meeting here on Friday, Mr Sridar laid out the roadmap for the current fiscal. Thus, net NPA ratio would be brought down to less than 2.5 per cent from 2.93 per cent in 2004-05, 50 new branches would be opened during the course of the year, the share of retail assets would be stepped up from the present 18 per cent to 30 per cent within a couple of years and 40 per cent of the incremental credit would be achieved through retail advances in the mid-market segment.

As part of the plan to hit the Rs 100,000-crore business level in the current fiscal (as compared to Rs 77,000 crore in 2004-05), the bank has proposed to shore up the capital base to meet the Basel II norm but not necessarily through another public issue.

Given a choice, the bank would rather like to cut down on the equity size, now amounting to Rs 799 crore. The bank proposed to go for the Tier II capital. There was also a proposal to opt for the preference share route but much would depend on the government policy in this regard. Mr Sridar also hinted at organisational restructuring to meet the challenge to be thrown up by the projected business growth.

A committee comprising eminent bankers had been formed to make suggestions in this regard. A section of shareholders complained about pdividend at 10 per cent for the year under review. Mr Sridar pointed out to the appreciation in the stock value since the IPO

Later talking to Business Line, Mr Sridar said that the bank had received RBI's clearances to open representative offices in Bangkok (Thailand) and Guanzhon (China).

The bank had earlier received approval for opening a similar office at Kuala Lumpur (Malaysia). "We also have plans to open representative offices in Colombo (Sri Lanka), Dhaka (Bangladesh) and Dubai (UAE)," Mr Sridar added.

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