The Hindu Business Line : L&T picks up 9.99 pc in City Union Bank

The bank on Thursday announced that its board of directors had approved a preferential allotment of 26.65 lakh shares to L&T at a price of Rs 169 a share.

"L&T expressed its interest to invest in CUB as a part of its investments portfolio viewing it as an attractive investment opportunity," says a press release from the bank.

Milestone

"City Union Bank considers the investment by L&T as an important milestone in its 102-year old history," the release says.

Mr N. Kamakodi, Director, CUB, told Business Line today that the bank already had a net worth of close to Rs 320 crore, close to the RBI's stipulation of Rs 300 crore.

In addition, current year's operations will take the net worth to around Rs 350 crore.

Observing that the bank did not look at infusion of funds from L&T as a means to satisfy regulatory capital requirements, Mr Kamakodi said that L&T coming on board would be "a source of comfort to all stakeholders."

"We have been growing at a CAGR of 25 per cent each year," he said, noting that the new funds would help the bank sustain the momentum.

Asked if L&T would get a berth in the bank's board, Mr Kamakodi said, "we will be pleased to offer them a board position."

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L&T picks up 9.99 pc in City Union Bank