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| United Bank to leverage RRB network for growth |
| BSs Reporter / Kolkata/ Bhubaneswar Feb 23, 2010, 00:43 IST |
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The state-owned United Bank of India (UBI) plans to leverage the branch network of its four associate regional rural banks (RRBs) in the east and north-east sectors for business growth. These RRBs are located in the states of Tripura, West Bengal, Assam and Manipur.
Simultaneously, the bank would continue its branch expansion plan under which it has been adding 130-150 branches every year. This was stated by Ranjan Kumar Mohanty, general manager (planning and prisec), United Bank of India (UBI) here.
Talking to the media a day before the opening of the IPO (Initial Public Offer) of the bank, Mohanty said, United Bank would add 13 more branches in Orissa by the end of the current fiscal taking the total to 120.
Since all the branches of the bank have become Core Banking Solution (CBS) compliant, technology along with some extra recruitment would be able to take care of the growing business.
UBI will hit the capital market tomorrow with its IPO to raise up to Rs 330 crore through offer of five crore equity shares with a face value of Rs 10 each. The price band of the shares has been fixed at Rs 60 to Rs 65 each. However, the retail individual investors and eligible employees of the bank would get a discount of Rs 3 per share. Post -offer, the government’s stake in the bank, which is 100 percent at present, would come down by about 15.8 per cent.
The bank would utilise the proceeds to augment its capital base and business growth plan. Business growth, profitability and sound risk management practices would be key areas of focus for the bank, Mohanty added. The bank, having a strong presence in the east, intends to increase the non-interest income as the net interest margin is under pressure. Though the bank’s capital adequacy ratio (CAR) was 12.93 percent by the end of September 2009, the bank has gone for the public offer to fund expansion, he added.
It may be noted, the bank has attained a growth of 34 percent in credit over the last 5 years as against 24 per cent growth in deposits during this period. Siddhartha Mahapatra, general manager (inspection), R P Bose, AGM and Ritwik Mohapatra of SBI Capital were present on the occasion.
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