The Hindu Business Line : UCO Bank to diversify into risk hedging

UCO Bank proposes to diversify into risk hedging through interest rate swaps, options and futures, both in foreign currencies and rupees, according to the Chairman-cum-Managing Director, Mr V.P. Shetty.

Addressing shareholders here on Tuesday at the company's first annual general meeting held after last year's first public issue, Mr Shetty stated that the new business initiatives would also see maximisation of fee-based income through the sale of insurance and mutual fund products, extension and expansion of depository services through the bank's wide branch network and garnering fresh corporate agency business.

"The whole purpose of the drive is to attain such a level of fee-based income as it would either fully cover or overtake the entire non-interest expenses on a sustainable basis", he observed.

The bank proposed to introduce in the current fiscal itself core banking solution through a network of 200 selected branches to leverage advancement of technology in innovation of new products.

As of now 86 per cent of the bank's total business transacted through 845 branches had been brought under computerisation and the aim was to achieve 100 per cent computerisation and introduce Single Window System in all the computerised branches during the current fiscal, he said.

Mr Shetty said UCO Bank targeted to achieve a minimum deposit growth of 17 per cent in 2004-05, with 30 per cent of the incremental deposit being in the form of low-cost deposits, i.e., savings and current deposits and accordingly proposed to launch a few attractive savings-oriented deposit schemes. At the same time, the credit deployment had been targeted to grow at a high rate of around 27 per cent and, to achieve it, incremental advances to the tune of Rs 5,000 crore had been budgeted.

Special thrust would be given to agriculture credit, particularly direct agriculture and accordingly strategies had been worked out for 1,200 rural and semi-urban branches with the target fixed for each of them to mop an additional business of Rs 2 crore. Attention was also being given to the existing retail loan products to cater to the mid-market segments through identified branches.

The risk management would receive top priority particularly for monitoring and review of advances portfolio such that the net NPA level could be brought down to less than two per cent at the end of the current year from last year's 3.65 per cent. The bank was not actively pursuing its earlier plan to open a branch at Nathu La in Sikkim, he added.

Most shareholders who participated in the discussion complained about the non-receipt of annual reports.