The Hindu Business Line : Higher interest rates to hit UBI's Q1 nos, says Chairman

MUMBAI: Higher interest rates and a consequential slow-down in credit offtake might affect the Q1 numbers of public sector lender Union Bank of India, its Chairman said on Monday. “We expect credit growth in Q1 to come down to 19 per cent while deposit growth is likely to be at 23 per cent. Higher lending rates have impacted the credit offtake in the first quarter,'' Union Bank Chairman and Managing Director M V Nair said.

The lender is also likely to see some impact in the form of mark-to-market losses on account of various investments, Mr Nair said, without divulging further details.

The bank has targeted a 25 per cent business growth in the present fiscal while its net interest margin (NIM) is expected to be at 2.85 per cent, he said.

Union Bank presently has a deposit base of around Rs 1,07,000 crore while its total advances stand at around Rs 76,000 crore. The lender has garnered around Rs 6,000 crore from its 400 days deposit scheme, which was launched early this year, Mr Nair said , adding, “the bank's retail deposit base has grown by a healthy 33 per cent during the first quarter.''

A series of hikes in its key rates by the RBI has forced many banks to hike their lending rates in recent months, leading to a decline in credit offtake. High inflation coupled with rising food prices are expected to influence the RBI's forthcoming quart erly review of credit policy scheduled for July 29 which could lead to a further monetary tightening. - PTI

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