UCO Bank aims to bring down govt stake to 75%
The lender has time until August to comply with this but it hopes to receive a further extension
image for illustrative purpose
UCO Bank on Tuesday said it aims to reduce the government's stake in the bank from the current 95.39 per cent to 75 per cent in several tranches by fiscal 2024-25, to comply with the minimum public shareholding norms set by SEBI.
The lender has time until August to comply with this but it hopes to receive a further extension, a top bank official said.
Four other public sector banks have also laid out plans to pare down government holdings to meet SEBI regulations.
"We don't need equity for growth as our capital adequacy is at 16.98 per cent. However, we must reduce the government's stake to 75 per cent to meet listing regulations, and we aim to do so within this fiscal year. The board has approved the issuance of 400 crore equity shares for this purpose. We will execute this in tranches," said UCO Bank MD & CEO Aswani Kumar.
He said various options will be explored as issuance plans get firmer. "To comply, the issuance of 330-340 crore equity shares at Rs 10 each would have been sufficient, but we have allowed some additional headroom," he said at a post-earnings interaction. Speaking about the credit growth outlook, Kumar mentioned that the bank is targeting a growth of 12-14 per cent, and corporate lending is expected to remain robust with a growth target of 3-4 per cent. Amid a challenging environment for deposit raising, the bank aims to maintain a CD ratio of 75 per cent and retain a net interest margin of 2.9-3 per cent. The bank has decided to expand its branches to deepen its footprint. It plans to open 130 branches this fiscal year in areas with little or no representation.
UCO Bank's rural network coverage is 35 per cent of its total network of 3,300 branches across the country. Kumar also stated that the bank will invest Rs 1,000 crore in IT infrastructure this fiscal year and will modernize its treasury operations.
