Union Bank targets 23 percent deposit growth

July 15th, 2008 - 6:56 pm ICT by IANS  

Kolkata, July 15 (IANS) Union Bank of India has targeted a deposit growth of 23 percent and credit growth of 22 percent this fiscal, a top bank official said here Tuesday. “We expect a credit growth of 22 percent and a deposit growth of 23 percent this fiscal,” bank chairman and managing director M.V. Nair told reporters on the sidelines of an ongoing banking conclave.

Union Bank has headroom to raise Rs.25 billion this fiscal, which will be done through issuing perpetual and tier-II bonds, he said.

Talking about the declining income from treasury, he said his bank needed to have additional sources of revenue.

Union Bank would now concentrate on sales of insurance, mutual funds, advisory services and transaction banking to get that revenue.

Last fiscal, non-interest income grew 55 percent, which was mainly from treasury income, recovery from written off accounts and core businesses, he added.

The bank’s net interest margin last fiscal was 2.8 percent, which would be maintained this fiscal, Nair added.

Union Bank’s non-performing assets stood at 0.17 percent last fiscal. “This has come down further in the first quarter of the current fiscal,” he said.

The bank now plans to open a branch in Hong Kong Aug 1. It has a representative office in Shanghai and another in Abu Dhabi in the UAE.

The bank has also signed a memorandum of understanding (MoU) with KBC Asset Management NV, a Belgian asset manager, to form a joint venture asset management company in India.

The bank has already ventured into life insurance along with Bank of India and Daiichi Mutual Life Insurance of Japan.

At present, Union Bank has 2,500 branches across India and plans to add another 500 during the current fiscal.

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