Union Bank to post lower growth

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Union Bank of India will post a lower business growth in 2006-07 vis-à-vis 2005-06. "Last year our business growth was 25 per cent; it will be less than that this year," Mr M.V. Nair, CMD of Union Bank, told Business Line here on Friday.

Mr Nair would attribute the projected lower business growth of his bank to overall drop in business in the bank industry, as estimated by Reserve Bank of India for the current fiscal.

"In 2004-05 and 2005-06, the banking industry as a whole posted more than 30 per cent growth in advances each year but this year, according to RBI, the growth will be around 20 per cent," he said. "With a projected 20 per cent growth in deposit and 25 per cent advances, Union Bank will surpass the banking industry's projected growth of 17 per cent growth in deposit and 20 per cent advances for the current year but our performance this year will be less than that in the last year," he observed.

In past two years, Union Bank took the hit on account of the depreciation of the securities but this year there would be no such thing. The growth in core banking would boost the net interest margin to 3.07 per cent from last year's 3.03 per cent. More important, the bank laid a good deal of emphasis on stepping up the fee-based income in the form of sale of insurance policies, mutual fund products and e-ticketing etc.

About 750 core banking branches of the bank would also act sales outfits. "This year we hope to earn about Rs 50 crore of fee-based income as compared to Rs 21 crore in the last year and Rs 12 crore in the year before that", he said.

In West Bengal, Union Bank, the CMD informed, proposed to increase the number of branches to 100 as soon as possible from the present 85. "We have licences in hand for four and we'll apply for 11 more shortly," he said.

MoU with KMC

Earlier, Mr Nair attended the MoU signing ceremony marking the launching of the direct salary scheme for 35,000 employees of Kolkata Municipal Corporation.

Taken from Business Line

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