UTI Bank to raise Rs 200 crore Tier-II capital next year

UTI Bank expects to raise close to Rs 200 crore in Tier-II capital next year. The first new generation private sector bank in the country also expects a 25 per cent growth in its Rs 20,000 crore balance-sheet size.

Addressing a media conference in the city, P J Nayak, chairman and managing director, said the bank had not ruled out the option of raising Tier-I capital and could go in for capital infusion if it was required.

"We are strongly profitable and the way we are growing I do not foresee requiring to go in for Tier-I capital, but we will keep our options open," Nayak said.

"There is no compulsion for inorganic growth right now and we see ourselves growing through the organic route for the next couple of years at least. We will raise close to Rs 200 crore in Tier II capital next year for our operations," he said.

UTI Bank which has posted a net profit of Rs 191 crore in the first nine months of this year expects to clock a 50 per cent growth in its bottomline this year.

"Over the last five years we have consistently seen our net profits grow at between 45 and 50 per cent and this year from all indications it should be no different," Nayak indicated.

The bank had posted a Rs 192 crore net profit in the last fiscal. Nayak said that UTI Bank had seen good credit growth and the cement, steel, auto component and automobile manufacturers were adding capacity in the country.

"What we are seeing is that while working capital fund cycles have come down, the demand for term loans have gone up. This indicates that capital formation is taking place and it is very healthy for the economy in the long term," he said.

The bank which had a retail exposure of 22 per cent expects lending to the retail sector to go up significantly in the next one year.

"We expect contributions from the retail segment to touch 30 per cent by March 2005," Nayak said.