Like last week, this time too UTI Bank Chairman and Managing Director PJ Nayak stayed away from the bank's board meeting on Wednesday. Immediately after the meeting, a visibly relaxed Nayak answered media queries. Excerpts: |
Will you now go ahead with the ADS issue? |
The board is yet to decide the means through which the bank will raise capital. It could raise capital through an overseas listing (ADS), a preferential issue, etc. |
It is evaluating all options. I will meet the new UTI-I administrator shortly to discuss the issue of raising capital. Personally, I am in favour of raising capital through a large one-time issue. |
To what extent will this dilute the existing shareholders' stakes? |
Whenever the bank raises capital, we will aim at 20 per cent dilution in shareholding. The bank will issue over 230 million shares. |
How urgent is the need to raise capital? |
The bank is growing by over 35 per cent year-on-year and we would need capital to support this growth. The bank will have to raise capital in the final quarter (January-March 2005) of the current fiscal or else we will have to downsize our assets. |
Tell us about your growth plans. |
We have an ambitious expansion plans overseas "" in Asia and West Asia. The bank has received in-principle approval from an inter-ministerial committee and the Reserve Bank of India (RBI) to set up five branches in Sri Lanka. |
It is also planning to set up an offshore banking branch in Singapore and a branch in Hong Kong. We are awaiting approval from the local authorities in Dubai to set up a representative office. |
We are also looking at China as a potential business destination on account of the growing trade flows between China and India. The bank has sent a team to China to evaluate the business proposal. We plan to open a representative office in Shanghai subject to regulatory approvals from the RBI and the local authorities. |
Will you go for some local acquisition? |
We are growing at around 35-40 per cent year on year. I see no need to change the existing business strategy. The bank will continue to grow organically. |
Where do you see UTI Bank five years down the line? |
UTI Bank today is an all-India bank. We have 241 branches, 28 extension counters and 148 ATMs spread across 156 cities and towns. We plan to expand our branches to various district headquarters. |
In the next three to five years, UTI Bank plans to have a presence in most of the rural areas, which will enable the bank to boost its agriculture and rural lending. |