Union Bank keen to compete in credit cards private equity businesses

Mumbai: Public sector bank Union Bank of India (UBI) is planning to enter three new businesses, according to chairman and managing director M V Nair.

The three businesses in the offing are general insurance, credit card and private equity.

Commenting on their prioritisation, Nair said that first the bank would finalise the life insurance venture, followed by the mutual fund business. The bank is discussing the possibility of joint ventures for the mutual fund business with some foreign companies. Further down the list are the three probable businesses of general insurance, private equity and credit card businesses.

Nair said that UBI plans to get its general insurance off the ground sometime in financial year 2008-09, but is yet to get a fix on the time frame for its credit card and private equity ventures.

Last year, UBI had signed a MoU with Bank of India, and with Japanese insurance major Dai-ichi Mutual Life Insurance, with Bank of India as the majority shareholder in the venture with a 51-per cent stake in the venture, followed by Dai-ichi''s 26 per cent, and the remaining 23 per cent owned by Union Bank. (See: Union Bank, Bank of India, Dai-ichi Life join hands for Life Insurance JV)

Nair said that UBI had changed its deposit strategy last year, enhancing its focus on core deposits. He said the bank is using that strategy to contain the growth of wholesale deposits, which were at Rs18,300 crore as on 31 March. Core deposits are seen growing at 25 per cent during July-September, and may end the year with a 28-30 per cent growth.