The Hindu Business Line : UCO Bank to focus on retail, small enterprises

UCO Bank has set a business target of Rs 1 crore per month for for the small enterprises segment and a target of Rs 60 lakh business for the retail segment, as part of its initiatives to focus on these segments.

This strategy will help the bank increase its share of low cost deposits (current account and savings account) from 29 per cent to 31 per cent by the end of this year, said Mr V. Sridar, Chairman and Managing Director.

In Mumbai recently to inaugurate the bank's initiatives for the small enterprises segment, Mr Sridar said the bank's cost of funds is currently at 5.27 per cent. "It is very high. But it may not go down this year as interest rates have moved up. We can only address this by improving our CASA ratio."

To add branches

Retail and small enterprises (SE) segment currently form 19 per cent of the bank's total loan book and the target is to increase it to 30 per cent by the end of this year. To achieve this the bank will increase the number of branches under core banking services from 14 to 125 by March 2007 and set up hubs for credit processing by December 2006.

"Centres which have launched the initiatives for SE and retail, have to meet their targets by 120 per cent," he said.

The bank will launch an aggressive deposit mobilisation campaign from September 11 to November 10. During this period, the bank is planning to offer incentives for its staff such as foreign tours for the top 10 branch managers whose branches record highest growth with their spouses, Mr Sridar said.

Follow-on issue

The bank, which has 74.98 per cent of Government share holding, may come out with a follow- on public issue in the next fiscal.

"There is no scope for raising capital this year as we have already raised Rs 200-250 crore of hybrid capital, Rs 500 crore of upper Tier II and Rs 250 crore of Tier II capital," he said.