Union Bank public issue by March

The public issue of Union Bank of India is expected to hit capital markets in the fourth quarter itself, said Chairman and Managing Director K Cherian Varghese, at press conference in Kochi on Tuesday.

The issue is aimed at shoring up its capital adequacy ratio (CAR) "� which stood at 10.5 per cent as on September 30, 2005 "� in view of the robust growth in credit and to meet the Basel II norms. Post issue the bank's CAR is expected to be 12 per cent.

Varghese said that the draft prospectus of the issue had already been filed with the Security and Exchange Board of India (Sebi) and its approval was awaited.

The bank had already received the approval of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) for the issue.

The Union Bank CMD was hopeful of getting Sebi's nod and the issue hitting capital markets by March 6.

"The price band would be set according to the market price of the scrip just before the issue date. I can not comment on it at present," he said.

In 2005, the board of Union Bank had approved the issue of further equity capital of up to 4.50 crore shares by way of a follow on public offering. The issue will be through the book-building route. Union Bank had its public issue in 2002.

He said that post issue government of India's share holding would come down to 55.43 per cent from the current 60.85 per cent.

Credit offtake of the bank has been increasing at 33 per cent, higher than the industry average of 30 per cent. He said that growth would sustain itself in the current financial and net non-performing assets (NPAs) would be well below the 1.5 per cent level.

"The third quarter results of the bank will be announced in the last week of January," he added. Bank's 2065th branch had been opened at Mallappally in Pathanamthitta district of Kerala, which is the bank's 125th branch in Kerala.

Union Bank has achieved 100 per cent computerisation of branches and 75 per cent of the business is under core banking solution network. It has 434 ATMs at 160 centres.