Union Bank of India plans to raise Rs 2,500 crore via QIP in July

Days after it got shareholders' approval to raise around Rs 3,700 crore, state-owned Union Bank of India has said it's planning to mop up Rs 2,500 crore through qualified institutional placement (QIP) in July.

"We may look at raising Rs 2,500 crore through the QIP route towards the end of the next month," the bank's chairman and managing director Arun Tiwari told PTI.

In the recently held AGM, the bank has received its shareholders' approval for raising capital of up to Rs 3,700 crore, including capital infusion by the government, through public issue and/or rights issue or private placement.

The city-based bank, which missed out capital infusion from the government last fiscal, has sought above Rs 1,200 crore this fiscal, according to sources.

Currently, the government holds 60.13% in the city-based bank. In the March quarter, the bank's net profit dropped by 23.48% to Rs 443 crore from Rs 579 crore a year earlier. The dip in profit was on account of increase in tax outgo and on higher provisioning for bad loans.

However, for the full fiscal its net profit increased to Rs 1,782 crore from Rs 1,696 crore in financial year 2013-14. In the march quarter, its operating profit improved 25.2% to Rs 1,652 crore from Rs 1,320 crore in the year-ago period.