United Bank of India to tap the market in early January

Government-owned banking entity United Bank of India is considering tapping the capital market in early January next year. The bank plans to utilise the proceeds of the proposed initial public offer (IPO) to shore up its capital to risk asset ratio.

The Kolkata-headquartered bank plans to offer 5 crore shares of Rs 10 each through its initial offer. United Bank’s fund raising plan also includes raising Rs 550 crore via an innovative perpetual debt instrument issue in the current fiscal. It is also seeking government aid in the form of Tier-I capital worth Rs 800 crore.

Post fund infusion, the bank hopes to maintain its capital to risk asset ratio of over 12% till Mar 2012.

Meanwhile, the bank has completed 100% migration to core banking solution (CBS) in a period of two years with all 1453 branches being brought under CBS.