12,106.90-62.95
Stock Analysis, IPO, Mutual Funds, Bonds & More

Uco Bank taps LIC for up to 15% stake sale

The bank has reported Rs 601.45 crore net loss for the June quarter.

, ET Bureau|
Aug 09, 2019, 08.50 AM IST
0Comments
Getty Images
investment-getty
Total provision rose to Rs 1,803 crore from Rs 1,781 crore.
Kolkata: State-owned Uco Bank has approached the Life Insurance Corporation of India (LIC) to acquire up to 15 per cent stake in it as the bank is looking to pare government holding to below 75 per cent to comply with sectoral regulations.

The Kolkata-based lender has a fortnight ago written to the insurance giant seeking an investment of about Rs 1,000 crore of equity to this end, Uco chief executive officer AK Goel said. The government currently holds 92.52 per cent in Uco. Goel said that the bank would require about Rs 4,500-5,000 crore of capital this fiscal, and the management is looking to raise it from the government and institutions such as LIC.

"Raising capital from market is not conducive at present," he said. The bank's capital adequacy ratio was at 10.88 per cent at June-end. Uco has raised Rs 500-crore tier II bond from LIC in the June quarter.

The bank has reported Rs 601.45 crore net loss for the June quarter, making it 15th consecutive quarterly loss, despite rise in treasury income and fall in provision against bad loans.The bank had reported Rs 599 crore loss in the year-ago period, while the loss for March quarter was Rs 1,552 crore.

Uco's operating profit rose marginally at Rs 1,201 crore, compared with Rs 1,182 crore, backed by higher earnings from treasury operation at Rs 875 crore as against Rs 12 crore loss in the year-ago period.

Total provision rose to Rs 1,803 crore from Rs 1,781 crore, while provisions against bad loans fell sharply to Rs 1,375 crore from Rs 2,038 crore, with slight improvement in asset quality.

"We are very happy with our results. Our operating profit and net interest income in the last quarter have been the highest in the last 14 quarters," Goel said.

Also Read

LIC finalising plan to cut stake in UTI AMC

LIC waives off charges on credit card payments

Buy LIC Housing Finance, price target Rs 470: Kunal Bothra

LIC pays Rs 2,611 cr dividend to government

Sell LIC Housing Finance, price target Rs 395: Chandan Taparia

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service