UCO Bank eyes merger by Mar '08

In a bid to boost its business, Kolkata-based UCO Bank is looking at the merger route by the end of this financial year.

"We will not acquire any banks, but will merge with some other banks in three months. This move will help us cross the total business figures of Rs 2 trillion," said SK Goyel, chairman and managing director.

Currently, the bank's balance-sheet size was Rs 1.23 trillion. Regarding the size of the banks it plans to merge with, he said they might be smaller or equal in size, but not larger than UCO Bank.

The chairman declined to divulge any further details saying that they were in the process of negotiation.

On being asked whether United Bank of India (UBI) is a possible candidate along with a South-based bank for the merger, Goyel refused to comment.

PK Gupta, chairman, UBI, has dismissed any such proposals from any banks. "As of now we haven't received any such proposals from any banks," he said.

When inquired, A C Mahajan, chairman and managing director, Allahabad Bank, said, "We have been weighing the merger option for the last 2-3 years, but there are no takers right now. Nothing is available as of now in the market."

Meanwhile, commenting on the recent downgradig by rating agency Crisil, Goyel said it was only for the Tier I perpetual bonds that the rating had declined, and not for the bank as a whole.

"It does not make any difference to the overall ratings of the bank, and for that matter, we received the best ratings of 9.35 for the Tier II Bonds," he clarified.

Regarding net interest margin (NIM), the chairman sounded optimistic saying, "NIM will increase to 2.8 per cent by the end of the current financial year compared with 2.52 per cent during the first half of the financial year."