UCO Bank wants foreign tie-up in proposed subsidiary

July 21st, 2008 - 7:29 pm ICT by IANS  

Kolkata, July 21 (IANS) The city-based UCO Bank is scouting for a foreign partner in a financial services company it proposes to float shortly, a top official said here Monday. “We are looking for a foreign partner, which will hold 26 percent in the new company,” UCO chairman and managing director S.K. Goel told reporters on the sidelines of the ongoing banking conclave.

The bank will hold 49 percent, while the rest will be with a domestic private sector firm.

UCO is targeting September as the launch month of the financial services company. If this materialises, Goel said, the bank’s fee-based income was expected to rise to Rs.2-3 billion this fiscal from Rs.630 million last year.

The financial services outfit, a non-government company, will start operations with an initial capital investment of Rs.250 million.

It will provide advice on financial products such as insurance and mutual funds, apart from dealing in loan syndication.

UCO Bank is talking to consultants Ernst and Young and PricewaterhouseCoopers to zero-in on a foreign partner, as well as working out project details.

Goel said his bank was targeting a profit of Rs.7.5 billion in the current fiscal, but at the same time, admitted UCO expected a Rs.1.3 billion mark-to-market loss in the April-June quarter.

The bank planned to raise Rs.3.25 billion capital in the second quarter, and a 20 percent credit growth this fiscal.

Goel also said there was no plans for a follow-on public offer. “We will think about it after the market stabilises.”

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