United Western Bank To Bring Out Bonus And Rights Issues

United Western Bank has decided to come out with a 1:5 bonus and a 1:2 rights share issues for its shareholders. The bank has also declared a tax-free dividend.

This was announced at the 63rd annual general meeting of the bank held on May 29 at Satara.

Commenting on the performance of the bank for 1999-2000, chairman P N Joshi said this decision comes in the light of the bank having a deposit growth of 26.6 per cent and a credit expansion of 40 per cent.

The bank saw a decline in the net non-performing assets ratio to 4.83 per cent, while it had a capital adequacy ratio of 11.94 per cent.

 

On account of this good showing, the bank has decided to come out with a rights and a bonus issue, Joshi said.

Joshi also informed shareholders that the Securities and Exchanges Board of India (SebiI) has advised the bank that with effect from 26 May, the bank's shares will be traded only in demat form.

To enable this, he said, the bank will shortly open its depository participant office in Mumbai.

Reviewing the banking sector for the financial year, Joshi said the financial sector developments in the country were positive and it was sustained by industrial recovery combined with low inflation rate and high foreign exchange reserves.

Although the aggregate deposits of the banks increased by a mere 13.5 per cent, the credit expansion was considerably higher at 16 per cent.

It was, primarily due to the reduction in cash reserve ratio and increase in non deposit resources of banks, he added.

Talking about the competitive climate in banking and the thinning interest rates, he said, "the share of non interest income has become a crucial factor in fixing the size of the bottomline of the bank and the bank staff has now acquired the skill needed to deal in government securities and secondary market shares."

The bank has entered into an agreement with KPMG to foray into international financial markets also, he added.