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Tamil Nadu-based City Union Bank plans to raise Rs 600-700 crore through qualified institutional placement, rights issues and other instruments in the next 2-3 years to meet its capital requirements.
It expects to clinch the first tranche of Rs 350 crore during the current fiscal depending on market conditions. The fund raising will help the bank generate a part of Rs 30,000 crore of business.
N Kamakodi, its managing director and CEO, said they needed around Rs 1,000 crore capital to sustain the growth rate of 20-25 per cent. “We had already raised Rs 258 crore via rights issues.”
The bank required fresh capital to the tune of Rs 3,000 crore to achieve its Rs 30,000 crore additional business target by 2016-17. It had already acquired Rs 1,700 crore, while it plans to pump in Rs 600-700 from its profits.
Meanwhile, CUB reported a growth of 22.2 per cent in net profit during the quarter ended on June 30, 2013, to Rs 90.29 crore as compared with Rs 73.89 crore for the same quarter a year ago.
Kamakodi attributed the increase to its opening of 125 branches in the last two years that helped it block new business besides curbing NPAs.
