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United Bank of India has its board's approval in place for raising Rs 550 crore through tier-II bonds, as and when there is need for capital, according to a top official.
“We have huge headroom under tier-II capital. We have our board's approval for raising Rs 550 crore through bonds. We will use it when there is a requirement. Right now, we have capital enough to sustain our growth for the next couple of years,” Mr Bhaskar Sen, Chairman and Managing Director, United Bank of India, told Business Line .
During the last fiscal, the bank received Rs 800 crore from the Government of India through the perpetual non-cumulative preference shares (PNCPS) route, and another Rs 308 crore through the preferential allotment. The capital adequacy ratio of the bank stood at 12.51 per cent, as on December 31, 2010, of which tier-I capital constituted 8.2 per cent.
Retail loans
The bank, which recently opened a retail loan processing centre in Kolkata, plans to add 25 such centres across the country this year. Currently, retail advances form 15 per cent of the bank's total loan book, and “we are expecting a 30 per cent growth on the retail side,” said Mr Sen.
With the retail processing centres in place, he expected there will be a professional approach towards sanction of loans and the turnaround time would be within two weeks.
Besides, the bank has also created a separate vertical for corporate loans, which forms 60 per cent of its loan book. The bank recently opened corporate branches in Mumbai, Delhi and Kolkata respectively.
Deposits
On the deposits front, Mr Sen said that the bank had a 40 per cent CASA deposit level as of December 2010, but admitted it would be a challenge to sustain these levels. “However, we are opening branches this year, and that would help us,” he added. There are plans to open 102 branches this fiscal, including 29 under the financial inclusion plan.
As part of its expansion plans, United Bank of India, which has a strong presence in the east and north-eastern parts of the country, opened its 31st regional office in Bangalore, which will have 34 branches, spread across Karnataka and Andhra Pradesh.
“We plan to add four branches in this region this fiscal,” said Mr Sen. This region contributes to Rs 5,800 crore of the bank's total business of Rs 1.32 lakh crore.
The bank will add about 300 ATMs by June-end this year, he said. The bank hired 1,400 probationary officers and clerks to its staff last fiscal, and plans to recruit another 300 clerks this year. Mobile banking services would be launched by June-end, Mr Sen added.
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