The net profit of the state-run Union Bank of India has gone up by 128. 51 % to Rs 521.13 crore from Rs 228.58 crore in the fourth quarter of the fiscal 2007-08.
Total income of the bank during the quarter rose to Rs 2913.10 crore from Rs 2336.72 crore recorded in the corresponding period of 2006-07.
The bank has sought capital infusion of around Rs 2,000 from the government via a rights issue of equity shares for maintaining its stake at 55.43%, an official familiar with the development told NewsWire18 on Wednesday.
?For maintaining its stake at 55.43% in the bank, the government needs to infuse 20 billion rupees through the rights issue,? the official said.
Chairman MV Nair, although he confirmed that the bank is in talks with the government for the rights issue, declined to comment on the amount needed to be infused by the government or the timing of the issue. ?We have to rightly time it because right now we are not in a big hurry. I should get a good valuation,” M V Nair said.
While the bank has got a headroom for raising capital upto Rs 4,000 crore during the current fiscal, it will adopt among various routes available including perpetual or subordinated bonds, raising money through its overseas branch at Hong Kong.
But the bank may not go for the preferential share as it was a costly affair today, said a senior bank official. The net profit of the bank for fy 2008 has gone up by 64.14% to Rs 1387 crore.
The bank has declared a dividend of 40% for the year to its shareholders. Net NPA has come down to 0.17% during the fourth quarter from 0.96% a year ago.
However the net interest income ( NII) of the bank remained flat during the quarter as it fell to Rs 833 crore from Rs 840 crore a year ago.