Financial Daily from THE HINDU group of publications
Wednesday, Sep 14, 2005
Financial Daily from THE HINDU group of publications Wednesday, Sep 14, 2005 |
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Money & Banking
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Non-Performing Assets Union Bank to test securitisation waters Our Bureau
Chennai , Sept. 13 UNION Bank of India proposes to gain experience in the securitisation market by selling some of its loans, the bank's Chairman and Managing Director, Mr K. Cherian Varghese, said at a press conference here on Tuesday. Initially, the bank might sell loans for about Rs 50-100 crore, he said, adding that the idea was only to learn about the securitisation market and not because of any pressure on capital adequacy. Last year, the bank bought auto loans of about Rs 160 crore, but this year it intends to downsize its portfolio. Mr Varghese said that the bank's follow-on public issue could hit the market anytime after three months, perhaps early next year. The bank intends to sell 4.5 crore shares at a premium, to strengthen its capital base. Post-issue, the government's holding in the bank will decline to about 55 per cent, from 60.85 per cent now. But before that, the bank could enter the market for raising Tier-II capital (mainly long-term debt). The bank can raise up to Rs 800 crore of loans, and proposes to do it in two tranches. He said that the bank had received approval from the Reserve Bank of India for opening two representative offices in West Asia — Dubai and Sharjah. The bank was awaiting clearance from local authorities, he said. Meanwhile, the Government of India gave permission on Monday for the amalgamation of three of the four regional rural banks (RRB) owned by the Union Bank of India in Uttar Pradesh.
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