Union Bank to raise up to Rs 8,100 cr in capital for business expansion

State-owned Union Bank of India will raise up to Rs 8,100 crore in capital through instruments like equity shares, additional tier I capital and tier II bonds to support business growth.

The lender’s board approved raising equity capital up to Rs 3,800 crore, within overall limit of Rs 8,100 crore, said the company in filing with BSE. Its stock closed 1.86 per cent higher at Rs 35.55 per share on BSE.

Union Bank has the option to use instruments including Follow-On Public Offer, rights issue, Qualified Institutions Placements and preferential.

The government held 83.49 per cent stake in the bank as on March 31, 2022. The bank would seek shareholders’ approval for capital raising plan at Annual General Meeting (AGM) of scheduled on June 30, 2022.

Its directors also gave nod to use AT 1 and Tier 2 bonds to raise capital not exceeding Rs 4,300 crore within the overall Limit of Rs 8,100 crore. Bank has option to issue foreign currency denominated AT1 and Tier 2 bonds.

The capital adequacy ratio of the Bank was 14.52 per cent with Tier I ratio was 12.2 per cent as at March 31, 2022.

Advances increased by 9.6 per cent YoY to Rs 7.16 trillion as at end March 2022. The retail lending Portfolio increased 8.65 per cent YoY to Rs 1.36 trillion as at March 2022.