The state-run lender said it may raise up to ₹3,000 crore through equity issuance in one or more tranches via further public offer, rights issue, qualified institutional placement (QIP), preferential allotment or other approved routes, subject to regulatory and shareholder approvals.
In addition, the board approved raising up to ₹5,000 crore through Basel III-compliant Additional Tier-I and Tier-II bonds, including foreign currency-denominated instruments.
Shares of Union Bank of India closed 1.02% lower at ₹167.15 on the NSE ahead of the announcement.
The fundraising approval comes after the bank reported mixed fourth-quarter earnings in April. Net interest income (NII), or core income, declined 1.1% year-on-year to ₹9,406 crore from ₹9,514 crore, while net profit rose 6.6% to ₹5,316 crore from ₹4,985 crore in the year-ago quarter.
Asset quality improved sequentially, with gross non-performing assets (GNPA) easing to 2.82% from 3.06% in the December quarter, while net NPAs narrowed to 0.48% from 0.51%.
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However, provisions for the quarter surged more than three-fold to ₹1,055 crore compared with ₹322 crore in the previous quarter, reflecting higher provisioning requirements. Fresh slippages also increased to ₹2,023 crore from ₹1,660 crore in the December quarter.
The capital raise is expected to provide the bank with additional financial flexibility amid evolving regulatory requirements and credit growth opportunities.
