Union Bank of India targets Rs 1.60 lakh crore business

Venkatachari Jagannathan
24 April 2006

Chennai: The Union Bank of India is targetting a total business of Rs 1,60,000 crore business (deposits = Rs 90,000 crore; advances = Rs 70,000 crore) during FY 2007. Last fiscal the bank did a total business of around Rs 125,000 crore (deposits = Rs 74,200 crore; advances = Rs 54,500 crore) placing it as the seventh-largest bank in the country and the sixth among public sector banks.

For the current year the thrust will be on the retail, agriculture small and medium enterprises (SME), and corporate sectors. The average interest yield from the four sectors are: retail and agriculture 8.75-9 per cent, SME 10-10.5 per cent, and corporate 8-8.5 per cent.

The bank's top brass were in the city for the past two days to discuss the annual business plan. According to chairman and managing director M V Nair, "The bank will be opening 100 more retail marts — a branch within a branch — to promote retail credit. The bank has 32 retail marts till date."

The bank has a retail portfolio of Rs 9,200 crore of which housing loans accounts for nearly 70 per cent. Selling third-party products like life and non-life insurance and mutual funds fetched the bank Rs 20 crore during FY 2006. "The target for the current year is Rs 50 crore," Nair said.

To increase its exposure to the SME segment the bank has identified 50 SME cluster centres. According to Nair, the bank's small and medium enterprises (SME) product, Union High Pride, is tailored to meet the needs of SMEs. The product offers credit limits from Rs 5 crore to Rs 25 crore. Last fiscal the bank lent Rs 6,834 crore to SMEs.

Strengthening its fund base with a public issue last year, Union Bank of India focused attention to tapping the competitive corporate segment. Expressing satisfaction with the bank's performance, Nair added, "We have gained substantial share in the power, port and other infrastructure sectors." According to him, 100 branches have been identified where specialised skilled person will act as the relationship banker for big corporates.