Union Bank sees 18% growth in credit offtake in FY10

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Reported by Debjit Chakraborty and Sourav Sen, edited by Vandana Hingorani/NewsWire18

Union Bank of India is likely to register 18% growth in credit offtake during the current financial year to March compared with 29.5% a year ago, Chairman and Managing Director M.V. Nair said. This is in line with Reserve Bank of India's estimate. In its mid-term review of 2009-10 (April-March) Annual Policy Statement last month, the central bank had cut its credit growth projection for 2009-10 to 18% from 20% earlier. With the impact of global economic meltdown still weighing on fresh corporate investments, growth in India's total bank credit slowed down to 9.7% for the week ended October 23 from 29.1% a year ago. Nair said Union Bank of India's net interest margin in the current year is seen at 2.5-2.6%, which is also lower than last year.

In 2008-09, the bank had earned net interest margin of 3.24%. "This quarter (October-December), our NIM is seen at 2.6% and for the full year it is likely to be 2.5-2.6%," Nair said on the sidelines of World Economic Forum's India Economic Summit. He said interest rates are expected to remain stable in the current financial year, and likely to harden from April 2010.

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