P J Nayak, chairman and managing director of the bank, said a branch has already been opened in Singapore. “We have also received a licence for representative office in Shanghai,” he said.
UTI Bank wanted to start a branch in Shanghai, but the Chinese government asked the bank to first start a representative office. “They said they’ll consider the branch plan after two years.”
Nayak said the bank is also going to Hong Kong and has made an application for a branch in Sri Lanka.
“We already have a representative office in Dubai. We have also sought to start a branch in the financial centre there.”
The intention, according to Nayak, is to gain a pan-Asia footprint in double-quick time.
“We must try and support Indian companies as they increase trade in the region. India’s trade within Asia isgrowing much faster than elsewhere. So there is a great opportunity,” he said.
On the domestic front, Nayak had earlier said he expects UTI Bank’s advances or loans to increase by 50% in the year to March 2007.
Non-food credit offtake or loans given by banks rose 36% in the last fiscal as companies borrowed more to invest - as did individuals.
The bank late in May said it will raise Rs 2,500 crore in the current fiscal year to fund loan growth.
Nayak had then said the bank plans to sell hybrid securities as part of this move.
Hybrid capital doesn’t dilute the ownership of existing shareholders -just like debt. The only difference is, it absorbs operating losses.
Because of its non-dilutive nature, such capital improves the return on equity.
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