Ubi Bond Draws Only Rs 140 Crore

United Bank of India (UBI) has managed to raise just Rs 140 crore from the private placement of its five-year bonds against the targeted Rs 200 crore.

The bonds carry an interest of 11 per cent with a three-year lock-in period. The offer was open for one day - the last day of the last fiscal.

The denial of the government to infuse fresh funds into the weak public sector bank before the end of the last fiscal, forced the bank to borrow from the market to meet the RBI's capital adequacy ratio stipulation of more than 9 per cent. Post-bond issue, the bank's ratio stands at 10.44 per cent.

 

Executive director G Sundaravadivel, said: "We are still involved in dialogue with the government on the issue of raising our capital, but nothing has been finalised."

Meanwhile, the bank has declared a 30 per cent dip in its net profit to Rs 19.14 crore in 2000-01. The profit would have been higher but for an additional Rs 67 crore towards voluntary retirement scheme and staff related expenses.

Outgo on account of exgratia amounted to Rs 5,251 crore, while gratuity payment was Rs 17.70 crore. Outgo of funds for pension was Rs 17.09 crore. Interest income stood at Rs 1930.82 crore income on other head was Rs 164.74 crore.

The bank's total business crossed Rs 25,000 crore mark against Rs 84.29 crore and Sundaravadivel hopes to cross the Rs 30,000 crore mark in 2001-02. Deposits increased 10.1 per cent to Rs 18,477 crore which is expected to rise to Rs 22,000 crore in 2001-02.

Advances on the other hand increased 19.2 per cent to Rs 6,560 crore, while UBI hopes to advance another Rs 2,000 crore in the current fiscal. This fiscal the bank will focus on retail lending, where special thrust has been put on education loans, house building loans and retail trade finance.

Although the bank has recovered Rs 100 crore through its one-time deposit scheme, its net stands at Rs 600 crore, while gross NPA was Rs 1,400 crore, against Rs 620 crore and Rs 1,500 crore in the previous period.