The Hindu Business Line : UTI Bank bullish on biz model of organic growth

HIGHLY bullish on the current business model of organic growth that has been helping it register growth in the range of around 50 per cent, UTI Bank says it is not interested in inorganic growth plans for the time being.

Though the bank had planned merger of Global Trust Bank with itself three years back, it had to drop the plans owing to various reasons including the high net NPAs of the Hyderabad-based private sector bank.

Stating that UTI Bank was confident of its current business model working excellent for at least another couple of years, its Chairman and Managing Director, Mr P.J. Nayak, said the bank would consider plans on inorganic growth only when it failed to achieve the sort of growth rates it has been achieving in the last couple of years.

Addressing newspersons after inaugurating the bank's branch at Gulzar Houz near Charminar in the old city here on Wednesday, Mr Nayak said, "At present, there is no compulsion for us to think of inorganic growth."

Expressing comfort over the existing capital adequacy ratio of 11.2 per cent, he said the bank would achieve at least 30 per cent growth during the next fiscal without the need for raising tier-I capital. He was of the view that servicing the equity was expensive than debt.

On the issue of offering board positions to HSBC, which has recently acquired Commonwealth Development Corporation's (CDC) holding in UTI Bank, Mr Nayak said the bank had no objection but had not yet received any request from HSBC for board positions.

Stating that HSBC was learnt to have obtained the approval of the Foreign Investment Promotion Board for acquiring the holding of CDC in UTI Bank, he said the RBI approval was awaited.