CUB looks to augment capital by Rs 3,000 cr

City Union Bank (CUB) has said that it would require around Rs 3,000 crore capital to reach its targeted Rs 30,000 crore total business over the next five years. The 107-year-old private bank has said that it is looking at various modes including Qualified Institutional Placement (QIP) to raise around Rs 1,000 crore.

Also, it said the investment of L&T Finance would help it increase its portfolio to SMEs. L&T Finance has a five per cent holding in the bank for which it had invested around Rs 25-30 crore.

N Kamakodi, managing director and chief executive officer, CUB, said the bank's networth as on March 31, 2011, was Rs 1,007 crore as compared to Rs 825 crore a year ago.

 

It has set a target to grow by 25-30 per cent over the next five years, and to maintain this growth it would need around Rs 3,000 crore capital.

He said the bank has enough room to increase the tier-2 capital from the 10-15 per cent at present, to around 50 per cent.

The bank's profit after tax in 2010-11 was Rs 215.05 crore as compared to Rs 152.76 crore, an increase of 40.77 per cent. Its total income rose 25.06 per cent to Rs 1,375.81 crore from Rs 1,100.10 crore.