City Union Bank to come out with rights issue

Chennai:

City Union Bank has decided to appoint a sub-committee on its proposed Rs 400 crore rights issue even as the bank’s net profit rose by 27 per cent, according to the bank’s managing director and chief executive officer N Kamakodi.

“The board has initiated the process of appointing a sub-committee to look for the rights issue which is expected in six-months time. But we will be declaring the exact share price and funds after getting approval from SEBI,” Kamakodi told reporters.

Stating that the bank has been monitoring the market conditions, Kamakodi said a merchant banker would be appointed for processing the rights issue.

The proposal for raising funds is aimed at meeting the bank’s fund requirement over the next few years. Kamakodi said the bank should have a networth of around Rs.3,000 crore by 2015 going by its business plans.

The bank recorded impressive growth in all the operational and financial parameters. Total deposits of the bank grew  by 28.68 per cent to Rs 15412 cr as on December 31, 2011 from Rs 11977 cr as on December 31, 2010 and its gross advances went up by 29.47 per cent to Rs 11027 crore as on December 31, 2011 from Rs 8,517 cr as on December  31, 2010. 

Total income for the third quarter ending December 31, 2011, soared by 40.09 per cent to Rs 489.33 crore from Rs 349.29 crore in the year-ago period.

For the nine-month period ending December 31, 2011, the
bank's total income rose to Rs 1,366.59 crore from Rs 984.72 crore in the same period of the previous year.

The bank's balance sheet size increased to Rs 17,347 crore as of December 31, 2011, from Rs 13,547 crore as of December 31, 2010, translating into 28.05 per cent growth.

The bank currently has 286 branches and 378 ATMs across
the country and intends to increase the total number of branches to 300 by March, 2012.

The gross non-performing asset (NPA) for the period December 31, 2011 stood at 1.18 per cent and the net NPA at 0.51 percent.