Union Bank raises Rs 2,000 cr to shore up capital

Written By Unknown on Jumat, 22 November 2013 | 21.03

Union Bank of India today raised Rs 2,000 crore through issuing bonds that are compliant with the global banking norms, Basel III. "Union Bank has raised additional capital to the extent of Rs 2,000 crore by issuing Basel III-compliant unsecured redeemable non-convertible tier II bonds," the state-owned bank said in a statement.

The paper has a tenor of 10 years and carries a fixed coupon of 9.80 per cent per annum payable annually, it added. The bonds are rated AAA/stable by credit rating agency Crisil, the bank statement added. The bank's total capital adequacy ratio was at 9.72 percent as of the July-September quarter as per the Basel III norms, with the core tier-I (equity) capital at 7.11 percent.

To help its core tier-I capital, the government had allocated Rs 500 crore capital infusion to UBI as part of the Rs 14,000-crore capital infusion programme for state-run banks in the current fiscal, 2013-14. A slew of lenders including State Bank of India and IDBI Bank are mulling to hit the market with qualified institutional placement issues.

SBI has also firmed up plans to raise up to Rs 5,000 crore via tier-II bonds during the remainder of the fiscal, till March 31, 2014. The Union Bank scrip was trading at Rs 119.05, down 1.73 percent, on the BSE in the afternoon, with the benchmark Sensex which was down 40 points.


Union Bank stock price

On November 22, 2013, Union Bank of India closed at Rs 119.30, down Rs 1.85, or 1.53 percent. The 52-week high of the share was Rs 288.00 and the 52-week low was Rs 97.10.


The company's trailing 12-month (TTM) EPS was at Rs 31.17 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 3.83. The latest book value of the company is Rs 287.96 per share. At current value, the price-to-book value of the company is 0.41.


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