United Bank plans IPO in December 2009

United Bank plans IPO in December 2009United Bank of India is working out plans to raise funds worth Rs 300-400 crore, hitting the capital market via an Initial Public Offer by December end. The move will reduce government holding in the complete public sector bank to 80 per cent post-IPO.

Chairman and Managing Director of bank, Mr. S. C. Gupta, during the sidelines of FICCI banking conclave, in Kolkata, said, "We will go for an IPO once our capital restructuring exercise is complete by the end of September."

The bank will return amount of Rs 1,266 crore to the government after trimming its capital from the current level of Rs 1,532 crore to Rs 266 crore. Subsequently, the returned amount will be transferred to capital reserve account of the bank.

The bank is hopeful to register a 25 per cent growth rate in credit and 21 per cent increase in deposits during the current fiscal.

On further cut in Prime lending Rates, Mr. Gupta Said, "Our Asset-Liability Committee will meet early next week to take a call on interest rates. We might cut interest rates on both advances and deposits by about 25-50 basis points."

He stressed the need for long term funding for banks in order to effectively participate in infrastructure and deposit funding.