United Bank of India is likely to tap the capital market in the third quarter of the current financial year after wiping out its accumulated losses.
The bank also expects to pay dividend to the government, its shareholder, in the next fiscal, for the first time since 1992, executive director K N Prithviraj, told the media here. The bank posted a net profit of Rs 300 crore (Rs 3 billion) in 2004-05 compared with Rs 315 crore (Rs 3.15 billion) in 2003-04.
Total business grew by 11.4 per cent from Rs 31,179 crore (Rs 311.79 billion) in 2003-04 to Rs 37,187 crore (Rs 371.87 billion) in 2004-05.
Explaining the fall in net profit despite higher business, Prithviraj said this was owing to a fall in trading income from government securities. The bank earned Rs 318 crore (Rs 3.18 billion) from securities in 2003-04, but this dropped to Rs 250 crore (Rs 2.5 billion) for the fiscal ended March 31, 2005.
"Last year, trading income was more than the net profit. This time it is not and so this year the profit is more because of core banking business," he said.
On accumulated losses, he said the bank had accumulated losses of around Rs 278 crore (Rs 2.78 billion) and hoped to clean up its balance sheet by September 2005.
"After this, the bank might go for its initial public offer to raise tier-1 capital. The bank expects to pay dividend in 2005-06 after almost 12 years," he added.
Prithviraj said the bank hoped to reach the Rs 50,000 crore (Rs 500 billion) business mark by March 31, 2007. "The target is Rs 45,000 crore (Rs 450 billion) business in 2005-06 and, by 2006-07, business of Rs 50,000 crore (Rs 500 billion)," he added.
The bank will go in for an organisational revamp on the basis of a National Institute of Banking Management report, which is expected by May 30, 2005.
