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Our Bureau

To fund its business growth abroad

New Delhi March 13 UTI Bank on Tuesday indicated that it might raise about $754 million in the first half of the next financial year to fund its business growth abroad. These funds are to be mobilised under an existing medium term note (MTN) programme of € 1 billion (about $1.2 billion) launched this fiscal.

"MTN is a very convenient document as it is one master document that we can use in periodic tranches for raising resources. We have already raised $446 million and the raising of the remaining might happen even in the first six months," Dr P.J. Nayak, Chairman and Managing Director of UTI Bank, told reporters here today.

Buying Assets

He said that the remaining MTN resources of $754 million would be used primarily for buying overseas assets. Dr Nayak announced that UTI bank would open a "full service branch" in Hong Kong next week (March 21) and also a branch in Dubai in April this year. It already has a branch in Singapore and a representative office in Shanghai, China.

The rationale

Asked about the rationale for opening branches abroad, Dr Nayak said that UTI Bank was following Indian corporates, who are moving their footprints abroad.

"Our strength lies in following Indian corporates abroad. A presence abroad gives us an opportunity to do both trade finance and corporate finance for Indian companies," he said. In this regard, Dr Nayak said that UTI Bank aspires to do syndication of `foreign paper' for Indian companies, who are now raising funds abroad in a big way.

"Just as we have become market leaders in rupee corporate debt syndication, we have aspirations to do the same in foreign debt. As we get regulatory approvals, we will convert ourselves from being advisors to lead managers," Dr Nayak said. On whether UTI Bank would undertake retail lending at its Hong Kong branch, Dr Nayak said that the idea is to do it but not immediately.

Dr Nayak also said that he expected a credit growth of 30-40 per cent (in retail as well as corporate) for the bank during next financial year. "A 30 per cent credit growth is doable. There will be further monetary contraction as indicated by the RBI. We are setting up retail distribution centres in smaller towns," he said, adding that the bank's credit growth up to December 2006 on a year-on-year basis stood at 60 per cent.

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UTI Bank plans to raise $754 m debt for buys

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