The Hindu Business Line : Union Bank to shore up exposure to SMEs, farm sector

Union Bank of India intends to notch up a total business of Rs 1.6 lakh crore for the financial year ending March 2007, up from Rs 1.32 lakh crore it has at the moment. It expects to generate additional business from such key areas as agriculture and SMEs.

The bank, which will open 100 or so branches in the current fiscal, intends to shore up exposure to both SMEs and agriculture, said Mr M.V. Nair, Chairman, adding that specific branches will be identified for dealing in corporate finance to expedite processing and disbursement. He was addressing a meeting organised by FICCI on Monday.

More retail marts

A centralised processing system for retail finance is being weighed, while four asset recovery branches are to be set up in the current fiscal. The number of retail marts will also be stepped up from about 30 to 100.

The share of retail is expected to increase from 21 per cent to 25 per cent, while that of SMEs will move up from 12.5 per cent to 18 per cent.

The service provided to SME clients is likely to see more value addition, courtesy tie-ups with SIDBI and SME Rating Agency of India Ltd (SMERA), it is pointed out. Union Bank, which has a capital adequacy of 11.4 per cent, has no immediate plan to raise fresh equity, Mr Nair said.

"We will wait for the right opportunity... at the moment, we are comfortable with what we have," he stated.

Overseas plans

On another front, the bank is outlining a new overseas expansion plan, thanks to branches and offices planned in centres such as Hong Kong, Dubai and Shanghai.

Its applications to the RBI have been cleared and permissions from local authorities will have to be taken.

Nearer home, Union Bank intends to increase the number of CBS branches to 1,200, while its ATM network will be expanded by adding 500 locations.

Its current branch strength stands at 2,084.

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