Home » City Union Bank plans to raise Rs 500 crore via QIP

City Union Bank plans to raise Rs 500 crore via QIP

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Private sector lender City Union Bank on Wednesday said that it plans to raise Rs 500 crore via a qualified institutional placement (QIP). The bank will seek the approval of its shareholders for the proposed QIP issue in its annual general meeting on August 18.

“As done in the previous years, this year also we are seeking approval of shareholders by way of an enabling resolution. It may be recalled that last year also we obtained the approval of shareholders for raising capital through QIP but we have not utilised the same,” the bank said in an exchange filing.

The board of the Tamil Nadu-based bank has approved the fund raising proposal as an enabling resolution. The bank has not diluted any capital in the last 7 years. The last time the lender raised the funds through the QIP route was in July 2014 to the tune of Rs 350 crore, N Kamakodi, managing director and chief executive officer of the bank, had earlier said in an analyst call.

The bank’s capital adequacy ratio improved to 20.85% for FY22 compared to 19.52% in the previous year. The higher capital adequacy is mainly because of growth from gold loans, which carry zero risk weight, Kamakodi had said. As on March 31, the bank’s gold loan portfolio has increased by 38% to Rs 9,003 crore from Rs 6,540 crore in the previous year. Gold loans comprise 22% of its gross advances, which stood at Rs 41,156 crore.

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