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Union Bank to raise Rs10bn via debt

Union Bank to raise Rs10bn via debt
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First Published: Tue, Sep 02 2008. 09 56 AM IST
Updated: Tue, Sep 02 2008. 09 56 AM IST
Mumbai: State-run Union Bank of India plans to raise 10 billion rupees via debt in a month’s time, Chairman MV Nair said on Monday.
The bank has headroom to raise up to Rs35 billion and it would try to raise the amount by the end of 2008, he added. “We will raise as and when we require”.
It would be a mix of perpetual and Tier-II bonds, he added.
The bank would like to maintain its capital adequacy ratio at around 12% and the ratings of its loans above Rs100 million would relax its CAR by 0.70%, he said.
It was looking at a credit growth of 22% for the current fiscal.
The state-owned lender also plans to start insurance operations in December and a mutual fund in six months, Nair told reporters.
The bank has got the preliminary approval from the Insurance Regulatory and Development Authority and the first product would be launched by December, he said.
In December, the bank formed a life insurance joint venture with Bank of India and Japan’s Dai-Ichi Mutual Life Insurance Co.
The bank was in the process of developing the business plan for asset management foray and the process would take about six months, he said.
The Mumbai-based bank has formed a joint venture with Belgian asset manager KBC Asset Management NV.
He was speaking on the sidelines of an event to launch a new logo for the bank, joining its peers such as Bank of Baroda and Canara Bank, who have undergone re-branding exercises.
Union Bank would spend Rs750 million on advertising and publicity of the new logo and another Rs100-120 million to replace the signages at all its branches with the new ones, Nair said.
Shares in the bank ended 1.22% higher at Rs145.10 rupees in the Mumbai market.
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First Published: Tue, Sep 02 2008. 09 56 AM IST
More Topics: Unionbank | Funds | debt | Rupees | Insurance |