City Union Bank (CUB), has drawn up plans of raising capital valued at Rs. 1000 crore over the next 3 years in order to reach its business target of Rs. 50, 000 crore by the year 2013-14.
The bank has stated its aims of using instruments such as rights issue, qualified institutional placements (QIP) or via preferential allotments in the fund raising routine.
N Kamakodi, executive director of the bank said, “We would require another Rs 1,000 crore incremental funds over the next three years to reach our business target. If the bank has to grow at the rate of 30 per cent we have to increase our capital over three years”.
The bank has raised Rs. 200 crore over the past 2 years via rights issue and preferential allotments.
The Rs. 50, 000 crore goal of the bank includes Rs 27,000 crore deposits and Rs 23,000 crore credit. The current financial year is anticipated to end with the bank doing a business of Rs 16,500-17,000 crore as against Rs 13,700 crore last year.
The bank’s current net worth is Rs. 850 crore and would be increased to Rs. 1000 crore by December 2010, said Kamakodi.
Currently bank has 222 branches and has submitted application for another 62 branches to RBI.
Kamakodi said, “Our focus will continue to be the South, especially Tamil Nadu, where for another 10 years we have space to grow”.
The bank has also shown remarkable credit growth. Its loan portfolio including personal loans has seen a sharp rise.