Uco Bank To Come Out With Second Issue

Bhubaneswar: Kolkata-based Uco Bank is likely to go for a public offer during the current fiscal in order to restructure its capital base and achieve Basel-II compliance.

The time and the size of the issue have not been finalised. The bank also needs the approval of the government and the Securities and Exchange Board of India. This will be the second public offer by the bank, which had gone for its IPO in September, 2003 and raised Rs 240 crore from the market. Post-offer, the government holding in the bank is likely to decline from 74.98 per cent to 59 to 60 percent. The bank is also planning to convert the government equity of about Rs 300 crore into preferential shares. The bank has already raised Tier-I capital through innovative perpetual debt instruments for Rs 230 crore last year. It also issued upper Tier-II bonds for Rs 500 crore and subordinated debts for Rs 250 crore during 2006-07.

While the flagship corporate branches are able to provide credit in excess of Rs.60 crore, the mid-corporate branches are able to sanction loans between Rs 3 crore and Rs 60 crore. In another significant move to strengthen the sales marketing network, the bank recently appointed 400 retail sales executives to be deployed in 35 centres across the country, he said, adding that the bank has tied up with the Life Insurance Corporation of India for Bankassurance business. The bank is focussing on modernisation of technology and will take up linking branches under the core banking solution (CBS) in a significant measure during this year. Along with expanding network of CBS branches, the bank also plans to add 78 branches during 2007-08.