Managing asset quality to be priority: Union Bank CMD

Saikat Das
Moneycontrol.com

When the economy is booming, banks are among the biggest beneficiaries due to a surge in demand for credit. Conversely, when the economic growth shifts into a lower gear, banks feel the heat first. The risks are twofold: high rates of interest hurt demand for loans and lower profits. At the same time, there is also the risk that some of the existing borrowers may default on interest payments.
Macro-indicators over the past few months have been mixed, but an economic slowdown seems very much on the cards. And so is the fear of a rise in the non-performing assets of the banking industry in general.
But this time, the risk may not emanate from the large corporates, feels MV Nair, chairman and managing director (CMD) of Union Bank of India.