The Hindu Business Line : United Bank eyes 20% growth in biz

Mr Satish C. Gupta, the new CMD of the bank, told Business Line here that the thrust was being given on foreign exchange business, money market operations, SMEs and agriculture. “From foreign exchange business and money market operation, we hope to book Rs 100-crore profit in the current year,” Mr Gupta observed.

A good deal of emphasis was also being given ton improvement of productivity. “By this, I mean improvement of profit per employee, not merely increased business per employee,” he said and indicated that the managers at the branch level were being encouraged to take risks while advancing loans.

“If we want profit, we’ve to take a call on risks,” he said adding that bona fide decisions, even if were to go wrong subsequently, would not be questioned.

“There may be delinquencies, but there would be no undue fixing of responsibility if the borrowers are found to be honest and the projects viable,” he said.

“The regional offices and the head office will do the handholding”.

The target for incremental advances to SMEs had been set at Rs 2,000 crore in 2008-09 as compared to Rs 1,000 crore in 2007-08 and for agriculture sector at Rs 1,000 crore (Rs 300 crore).

“We’ve launched savings mobilisation campaign and the presence of 65 per cent of our branches in rural and semi-urban areas is an opportunity for us,” he said.

Precisely for the same reason, the bank was hopeful of raising the share of current account/savings account deposits to 40 per cent by March 2009 from the present 38.6 per cent.

A net interest margin of three per cent, as compared to present 2.6 per cent, was targeted.

With gross NPAs ruling at 3.9 per cent and net NPAs at two per cent, the bank is aiming to reduce the gross NPA to 2.9 per cent by March 2009, by stepping up recovery and also by cleaning the books by selling a chunk of the bad loans to asset reconstruction companies. “We’ve started identifying the loans that have gone bad and then we will do a valuation exercise and bundling of accounts before inviting bids for selling them,” he said.

Referring to the bank’s plan to go for public issue, Mr Gupta said it was too premature to say whether it would be a public issue or private placement. However, the exercise on capital restructuring is currently in progress. The essence of the restructuring would include bringing down the size of the capital from the present Rs 1,532 crore to around Rs 200-250 crore. Returning equity to the Government was one option. A portion of the equity might be transferred to reserve. Conversion of a portion of equity into perpetual non-cumulative preference shares and raising about Rs 1,000 crore, to achieve a CRAR in excess of 12 per cent as against 10 per cent at present, were also being considered. “A decision taken in this regard at our last board meeting has been forwarded to the Government and the Reserve Bank of India for approval and necessary action,” he observed.

More Stories on : Public Sector Banks | Outlook

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee recovers on RBI intervention

Birla Sun Life CEO quits

Forex reserves: Sinking feeling?

Currency derivatives daily turnover at $225 m

Oceanaa in pact for shrimp hatchery

SBT counter at Sabarimala

United Bank eyes 20% growth in biz

BoI looks to address SME issues

Vijaya Bank seeks Rs 1,800 cr from Govt

Bond prices gain

Oil cos allowed to sell bonds to RBI

Bond data show banks are reluctant to lend

Call rates close steady

TMB hikes deposit rates