Date:06/05/2005 URL: http://www.thehindubusinessline.com/2005/05/06/stories/2005050602410600.htm

Back UCO Bank 2nd public issue likely in H2

Our Bureau

Kolkata , May 5

UCO Bank is mulling second round of public issue of equities sometime in the second half of the current fiscal.

"The exact size and timing of the issue will be finalised after we've restructured our capital," said Mr V. Sridar, CMD of UCO Bank, here on Thursday.

The restructuring of the capital had become necessary in view of its large size, Rs 799 crore, and negligible reserve entailing low EPS and therefore low market price of the bank's share, he said. "We must enhance the shareholders' value even as we to keep in mind the Basel II requirements," he added.

Mr Sridar, however, declined to indicate the way the capital restructuring would be brought about. "There are several options available before us but, given a choice, we would like to go for the preference shares route," he said.

A portion of the equity would be converted into preference shares first to reduce the size of the equity hoping that such a reduction would boost the price making the situation favourable for the public issue.

"However much will depend on the Government which has to suggest how much of the equity is to be converted into preference shares and at what price," he said.

UCO launched its first public issue (IPO) in September 2003, offering an Rs 10 share at a premium of Rs 2 each, totalling Rs 240 crore.

Earlier, briefing newspersons about the bank's performance in 2004-05, the CMD said the net profit at Rs 346 crore (Rs 435 crore in 2003-04) was lower by more than 20 per cent mainly due to 45 per cent drop in treasury profit at Rs 192 crore (Rs 351 crore) and higher provisioning (29.95 per cent) at Rs 473 crore (Rs 364 crore).

However, in terms of all other parameters, the performance was much better than that in 2003-04. Thus net interest income at Rs 1,406 crore (Rs 1,195 crore) showed a growth of 17.66 per cent and non-treasury income at Rs 324 crore (Rs 274 crore) a growth of 18.24 per cent.

The gross NPA ratio dropped to 4.96 per cent (6.93 per cent) and net NPA ratio to 2.93 per cent (3.65 per cent).

Total deposits at Rs 49,470 crore (Rs 39,244 crore) showed a growth of more than 26 per cent and total advances at Rs 28,234 crore (Rs 21,343 crore) showed a growth of more than 32 per cent.