Comments
L&T Unnati Finance sold its entire stake in City Union Bank in a block deal estimated at over ₹183 crore. It sold 2.47 crore equity shares held in the Kumbakonam-based private sector bank at a price of ₹74.25 a share to Equinox Management Partners.
Rise in FII limit The bank’s share price recently hit a 52-week high and continued to rise after it was allowed to hike FII stake in it. This followed the RBI removing CUB from the list of companies banned from raising the FII limit up to 35 per cent of paid-up capital.
The limit was previously 30 per cent for the Bank.
In its announcement, RBI said for foreign institutional investors or registered foreign portfolio investors or qualified foreign investors and NRIs under PIS, individual ceiling shall be 5 per cent respectively and aggregate limit for all put together 35 per cent. Following this, the bank’s board also passed a resolution enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs.
The hike in FII stake will enhance its liquidity in the market and enable it to mop up more funds.
For the fourth quarter ended March 31, the bank reported a marginal increase in net profit at ₹83.34 crore, against ₹82.49 crore in the comparable previous year quarter. The drop in growth was attributed to provisioning towards stressed assets. The total income of the bank moved up to ₹726.26 crore for the quarter from ₹677.99 crore, a growth of over 7 per cent.
N Kamakodi, Managing Director and CEO of the bank, said during the fourth quarter, the bank had to provide a sum of ₹31 crore towards non-performing assets. “The difficult economic situation has had a slight impact on our asset quality.”
Not alarming The bank’s gross NPAs at the end of 2013-14 stood at 1.81 per cent, moving up from 1.7 per cent in the previous fiscal, while the net NPA level was at 1.23 per cent, up from 1.13 per cent. The provision coverage stood at 62 per cent. However, compared to the industry benchmark, “the rise is not really alarming,” he added.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.