City Union eyes $52.6M for 70-branch expansion

City Union Bank intends to raise US$52.6 million over the next two years to fund its expansion plans with 70 additional branches.

"This fiscal we will seek RBI’s (Reserve Bank of India) permission to open 70 more branches," said S. Balasubramanian, City Union Bank managing director and chief executive.

Balasubramanian had earlier announced the company’s plan of having 250 branches by March 2010 and had expressed his business plan to prepare the bank for "the next generation" by offering tech-savvy products and services.

"Our target is to have a net worth of US$210.6 million in two years time. For that we will have to raise Rs.250 crore," said N. Kamakodi, executive director of the bank.

Kamakodi however admitted that they have not yet determined the mode of raising the funds.

In order to attract young customers, the bank is now opening counters at colleges in the state.

It opened 19 new branches in the last fiscal year, taking the total branch network to 208 as of March 2009, Kamakodi said.

The bank is also boosting brand awareness in the educational institutions by opening ATMs.

The Kumbakonam, Tamil Nadu, India-headquartered bank is planning to open branches in tier II and tier III towns in the South, but prefers to confine it to major cities in the North for "operational convenience."