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UCO Bank's growth to go down by 12 pc

By Staff
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Kolkata, May 04: An overall liquidity crunch in the Indian Banking industry is likely to reduce the annual growth of public sector UCO Bank by about 12 per cent this year, UCO Bank Chairman and Managing Direcor V Sridhar said here today.

Speaking to newsmen after signing a Memorandum of Understanding (MOU) with the Birla Mutual Fund for distributing and marketting its products on commission basis, Mr Sridhar said as a result of the present liquidity crisis, the overall annual growth rate of the Bank was likely to plummet by 12 per cent to around 20 per cent by March 2007, compared to about 32 per cent, enjoyed by the Bank in last two years.

Moreover, the UCO Bank CMD said as a result the Bank's credit as well as deposit mobilisation might be reduced by 12 to 14 per cent from that of last year.

Asked whether the reduced margin of growth would in any way affect the future profitability of the Bank, Mr Sridhar said while the operating profit of the bank was likely to record marginal increase from last year's figure of Rs 852 crore despite the non-availability of fund, the profit after tax might remain in tact during the same period last year (Rs 297 crore).

Referring to his other future plans, specially in terms raising funds for future operations of the Bank, Mr Sirdhar said they had planned to raise about Rs 1200 to Rs 1300 crore during the current fiscal through different routes of Tier One and Tier Two.

Further elaborating he said while a portion of Rs 1300 crore would be raised through Upper Tier Two route by June this year, the rest of the amount would come through the RBI's recently introduced hybrid Tier Two norm before December.

About the position of the capital adequacy ratio both before and after the issue, the UCO Bank CMD confirmed that despite the inflow of additional fund, it would remain in the vicinity of 11.10 per cent.

Asked about the functioning of UCO Bank's international branches, Mr Sridhar said all the four international branches of the Bank in Singapore, Hong Kong and Malaysia were performing extremely well with each of them earning considerable profits and bringing in new business.

UNI

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