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Kolkata-based UCO Bank has put a halt on lending to power, road and real estate sectors. The bank also plans to do selective lending to sectors like iron and steel and textiles to de-risk its portfolio.
“If economic growth slows down then there could be some stress on assets. So we have decided to go slow on certain sectors,” said Mr Prabir K Datta, General Manager, Flagship Corporates, UCO Bank.
The bank is also taking corrective measures to improve its skewed loan book which has very high exposure to large corporates.
“No bank can sustain with such a lopsided portfolio. We are focusing on correcting the lending mix by improving our retail loan book,” Mr Datta told Business Line .
Corporate loans account for almost 60 per cent of the bank's total advances at present.
UCO Bank restructured almost 25 per cent of the total loans extended to state power distribution companies (discoms) amounting to Rs 5,000 crore during the fourth quarter of last fiscal. The total restructured assets grew to Rs 7,370 crore during the year, from Rs 6,345 crore last year.
Retail focus
The bank would focus on increasing its retail exposure both on assets and liabilities front. The bank aims to grow its CASA (current account and savings bank account) deposits to Rs 40,000 crore by March 2013, from Rs 23,000 crore as on March 2012.
“We have hired a young team of officers and have entrusted them with this task of mobilising CASA deposits,” he said. The bank added 1,000 employees in the clerical and another 1,000 in the officers' cadre last year. It is likely to hire a similar number this year.
On the assets side, the bank has been taking adequate measures to ease out processes and speed up the disbursements. “We have a number of good loan products, but they have not been doing too well due to delay in processing. So we have streamlined the system and we are monitoring it on a real time basis,” he said.
The bank also plans to add 600 branches to its existing network of 2,400 branches to shore up advances. The bank aims to double the share of retail to its total advances from the present level of nine per cent by the end of this fiscal.
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