Uco Bank, which has got Rs 675 crore as recapitalisation fund from the Centre this fiscal, is planning to sell its non-performing assets (NPAs) to the dealers in distressed assets like Arcil. The lender is scouting for a financial advisor to structure the deal.
Uco bank has sticky assets of Rs 919.08 crore on its books at the end of June quarter. The mounting NPAs was a major roadblock on the bank?s growth, forcing it to seek bailout funds from the Centre.
The bank, which had a net NPA of Rs 776.12 at the end of June quarter 2009, added close to Rs 143 crore to the bad assets by the end of first quarter of the current fiscal. The Centre, which holds close to 64% stake in Uco Bank, had infused Rs 675 crore in two tranches as part of injecting fresh capital to select banks. The latest round of fund infusion was done during June quarter with the Centre subscribing to bank?s tier-I capital instrument, perpetual non-cumulative preference shares aggregating Rs 300 crore.
Meanwhile, the bank has initiated a process of business restructuring with an aim to prepare for the changing market dynamics and shifting its focus to a modern, customer-centric business model. The bank is in the lookout for a consultant who will formulate the strategy for branch transformation within the first two months of the award of the contract. The consultant will have to implement the new strategy in at least in 500 branches in the next 6 months.