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UCO Bank to raise Rs 825 cr, aims profit growth of 82% this yr

UCO Bank to raise Rs 825 cr, aims profit growth of 82% this yr
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First Published: Tue, Jul 08 2008. 04 29 PM IST
Updated: Tue, Jul 08 2008. 04 29 PM IST
PTI
New Delhi : Public sector lender UCO Bank today said that it would raise Rs 825 crore from the market to fund its business growth and aims for a 82% increase in net profit this year.
“We are looking to raise Rs 325 crore through perpetual non-convertible preference shares during the second quarter and about Rs 500 crore from follow-on public offer in the third quarter of this fiscal,” UCO Bank Chairman and Managing Director S K Goel told PTI.
The capital raised will help the bank to record 25% loan growth for the next two year, he said.
“Hopefully, by the third quarter market should stabilise and that would provide us opportunity to raise capital from the primary market,” he said.
Asked about bottomline target for the current fiscal, Goel said, the bank expects to earn a profit of Rs 750 crore this fiscal against Rs 412 crore in the previous year.
The profit would increase by 82% over the last fiscal.
“Despite uncertainties and high interest rate we expect to achieve profit target as things are expected to look up after the end of the second quarter,” he said.
To achieve the profit target, he said the bank plans to increase its CASA (Current Account and Savings account) ratio to 35% as against 27% at the end of March 2008. This will bring down the cost of deposits by one per cent.
Besides, the bank plans to recover about Rs 1,050 crore from the bad accounts, he said, adding, of this Rs 150 crore would directly add to the profit.
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First Published: Tue, Jul 08 2008. 04 29 PM IST