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Union Bank of India.

BSE: 532477 Sector: Financials
NSE: UNIONBANK ISIN Code: INE692A01016
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OPEN 130.80
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VOLUME 156054
52-Week high 205.00
52-Week low 116.25
P/E 19.17
Mkt Cap.(Rs cr) 9,694
Buy Price 133.45
Buy Qty 175.00
Sell Price 133.55
Sell Qty 1617.00
OPEN 130.80
CLOSE 129.25
VOLUME 156054
52-Week high 205.00
52-Week low 116.25
P/E 19.17
Mkt Cap.(Rs cr) 9,694
Buy Price 133.45
Buy Qty 175.00
Sell Price 133.55
Sell Qty 1617.00

Union Bank of India. (UNIONBANK) - Chairman Speech

Company chairman speech

Chairman

Speech by Shri D. Sarkar Chairman & Managing Director Union Bank of India at 11thAnnual General Meeting of the Bank (26th June 2013)

Dear Shareholders

1. It is indeed a pleasure welcoming you to the 11th Annual General Meeting of theBank. Your support in the steady progress of the Bank over the years has been highlyvaluable. For this I would like to convey sincere appreciation to all the shareholders ofthe Bank on behalf of the Board of Directors and on my personal behalf.

2. Financial year 2012-13 was a challenging year for the commercial sector as well asbanking sector as economic growth slowed down to a decade low. During the year 2012-13India's real gross domestic product grew at 5.0 percent. While global situation remainedadverse the prospects deteriorated further with domestic challenges like high inflationat retail level rupee depreciation slowing consumption demand and a weak investmentclimate. Banking sector is the mirror image of the overall economic growth and thereforebanks also faced challenges during the fiscal year 2012-13.

3. In this backdrop let me share with you the performance of your Bank during the year2012-13. Your Bank's business strategies were aimed at consolidating business and lendingto productive sectors while managing the asset quality. The strengthening of systems andcontrol better risk management practices further initiatives towards a meaningfulfinancial inclusion and launch of Talking ATMs were other highlights of the year. Thedetailed discussion is already available in the Annual Report of the Bank. For the sake ofrelevance however I will highlight a few points.

4. The focus on customer centricity guided your Bank's performance during the year.Over the recent years the Bank has taken several initiatives to enhance customerconvenience increase transparency in all transactions and build a robust customerredressal mechanism. Through Customer Care Unit your Bank has created a centralizedcapability for handling all types of customer requirements be it online grievanceredressal reporting of service deficiency or any specific service request. The integratedCase Management Tool has been put in place to integrate complaints across deliverychannels and also to facilitate customer feedback.

Business & Profit

5. Coming to business performance your Bank's Global Business stood at Rs. 475673crore as of 31st March 2013 registering an annual growth rate of 17.8 percent. Grossadvances stood at Rs. 211911 crore while Total Deposits stood at Rs. 263762 crore ason 31st March 2013. Growth in business was supported by increase in low-cost depositsretail loans agriculture loans and loans to micro small and medium enterprises.

6. Your Bank's total income grew by 17.9 percent to Rs. 27677 crore for the year2012-13 from 23476 crore a year ago. Net interest income recorded annual growth of 11.0percent to Rs. 7543 crore. Operating Profit of the Bank increased to Rs. 5583 crore in2012-13 from Rs. 5254 crore during the previous year. Net profit recorded a growth rateof 20.8 percent and stood at Rs. 2158 crore for the year 2012-13 compared to Rs.1787crore in the previous year. The Bank has recommended a dividend of 80 percent for the year2012-13.

Improvement in Asset Quality

7. I shared in the beginning about challenges in the banking sector particularly aboutdeterioration in asset quality due to economic slowdown. Your Bank however was able toreduce gross non-performing assets (NPAs) from 3.01 percent of gross advances as of 31stMarch 2012 to 2.98 percent as of 31st March 2013. In fact on quarterly basis beginningJune 2012 your Bank was also able to record reduction in Gross NPA in absolute amount aswell as a ratio to gross advances. The Bank could also increase the provision coverageratio to 65.2 percent as of 31st March 2013 from 62.2 percent a year ago. This is regardedas a healthy development in order to strengthen your Bank's balance sheet.

Capital Strength

8. During the year 2012-13 the Bank allotted 4.62 crore equity shares of Rs. 10 eachat a premium of Rs. 230.89 aggregating to Rs. 1114 crore to the Government of India.Consequently the Government's shareholding in the Bank increased from 54.35 percent as on31st March 2012 to 57.89 percent as on 31st March 2013. With this Bank's total CapitalAdequacy Ratio as per Basel II stood at 11.45 percent as on 31st March 2013 which iswell above regulatory requirement of 9 percent.

9. The Bank's net worth improved by 20.7 percent to Rs.15777 crore during FY 2013 fromRs. 13075 crore in the previous year. Thus the Book value per share increased to Rs.264.37 as on 31st March 2013 from Rs. 237.48 in the previous year.

Overseas Operations

10. Your Bank has opened its second foreign branch at Dubai International FinancialCentre (DIFC) Dubai on 9th March 2013. Bank's other overseas branch is at Hong Kongoperational since May 2008. Deposits and advances of these two overseas branches stood atRs. 2763 crore and Rs. 13017 crore respectively as of 31st March 2013. Your Bank is alsoin the process of opening branches at Sydney in Australia and Antwerp in Belgium and asubsidiary at London in the UK during the financial year 2013-14. The Bank already hasrepresentative offices at Shanghai (China) Abu Dhabi (UAE) Beijing (China) Sydney(Australia) and London (UK).

Human Resource Management

11. The Bank is committed to nurturing its human capital in order to attain sustainablehigher growth. The manpower strength increased to 31798 as on 31st March 2013. During theyear Bank completed the recruitment for 4509 officers and clerks. Bank is also engagedin leadership development and succession planning considering the imminent challenges dueto large scale retirement in coming years.

Corporate Social Responsibility

12. Your Bank is committed to the objective of corporate social responsibility (CSR) bycreating enablers for social and community development. The 'Union Bank SocialFoundation' a trust set up by the Bank is spearheading its CSR initiatives. Through thetrust the Bank is engaged in empowering people through various developmental initiatives.

13. The Bank has set up 202 Village Knowledge Centres (VKCs) across the country. EachVKC assists in overall development of the village by coordinating with variousdevelopmental agencies/ Government departments and disseminate knowledge to farmers aboutlatest developments in methods of cultivation technologies proper use of fertilizerspesticides etc.

14. The Bank has also adopted 150 villages across the country and is involved indevelopment of these villages through a special scheme known as 'Union Adarsh GramYojana'. In these adopted villages various developmental activities are being undertakenlike providing safe drinking water sanitation and solar lamps. In these villages Bankhas adopted 150 Girl children as part of its initiative to increase enrolment of girlchild at the schools.

15. Your Bank has 14 Rural Self- Employment Training Institutes (R-SETIs) and 16Financial Literacy and Credit Counseling Centers (FLCCs) across the country. These R-SETIsand FLCCs extend financial literacy counseling and training to the needy people so thatthey become self reliant. Through these R-SETIs 28522 persons have been provided trainingso far and 18709 beneficiaries have been settled with employment.

16. During the year 2012-13 Bank donated a total of Rs. 1.24 crore for supportingactivities like rehabilitation in calamity affected areas cancer relief provision offood distribution vehicles and installation of solar lamps in villages.

Reaching out to the Society

17. Besides CSR activities your Bank's business focus is also on reaching out tohitherto unbanked population less developed sections of the society and creatingconvenience for them. I will briefly share some of these.

18. With a motive of encouraging women entrepreneurs the Bank extended finance to 6.13lakh women beneficiaries and loans increased by 32.1 percent to Rs 9053 crore as on 31stMarch 2013. This constituted 5.53 percent of adjusted net bank credit (ANBC) which ishigher than 5 percent mandated by the RBI. Similarly loans to Weaker Sections stood atRs. 15023 crore i.e. 9.2 percent of ANBC as on 31 st March 2013 higher than 6.3 percentof ANBC in the previous year. Advances to SC/ST covered over 1 lakh beneficiaries withoutstanding loans of Rs. 2617 crore compared to Rs. 1386 crore in the previous year.Loans to Minority Communities stood at Rs. 5289 crore covering over 2.7 lakhbeneficiaries.

19. Ernakulam district one of the Bank's lead districts in the state of Kerala wasdeclared by the RBI Governor Dr D Subbarao as country's first district to achieve'Meaningful Financial Inclusion'. Under this prestigious project your Bank focused on"need" creation rather than simply opening of accounts. With the help ofcommunity-based organizations Bank sensitized its customers about need for savings andcredit. This helped sharp increase in usage of mobile banking and number of operativeaccounts. Other than this your Bank extended banking services to 29497 unbanked /underbanked villages in 2012-13 by providing basic banking services through BusinessCorrespondent Model. Your Bank is also an active participant in implementation of theCentral Governments Direct Benefit Transfer Scheme.

20. During the last financial year your Bank unveiled India's first ever trulyaccessible and Talking ATM in Vastrapur Ahmedabad on 6th June 2012 for the visually andphysically challenged people. Your Bank has pioneered Talking ATMs in India. Union Bank'sTalking ATM model and workflow has set a benchmark for the banking industry. The Bank has100 Talking ATMs across the country as on 31st March 2013.

Awards and Recognition

21. Many initiatives of your Bank were recognized by the various organizations andagencies during the year. Your Bank received four IBA Banking Technology Awards for BestFinancial Inclusion Initiative Best Technology Bank of the Year Best Use of MobilityTechnology in Banking and Best Use of Business Intelligence. The Bank also received theprestigious ACI Excellence Award 2012 for implementing three remittance products. Forlaunching truly accessible Talking ATMs for the visually challenged the Bank received theprestigious IT Innovation Award from the Computer Society of India.

The year ahead

22. Global growth prospects are marginally better than a year ago but challenges anduncertainties remain. This will also impact India's growth though there is likelihood ofbetter growth in the 2013-14 than in the previous year. Your Bank will endeavor to capturethe opportunities with specific focus on increasing low cost deposits and augmenting loansto agriculture retail and MSME segments during the financial year 2013-14. Overall thecustomer centricity will continue to be the driving force for the Bank.

Acknowledgement

23. On behalf of the Board of Directors of the Bank I would like to express my sincereappreciation to all the shareholders for their continued and valuable support in growth ofthe Bank. I also convey my sincere gratitude to the Government of India Reserve Bank ofIndia Securities & Exchange Board of India lnsurance Regulatory and DevelopmentAuthority Central Vigilance Commission and other authorities for their valuable guidanceand support. The co-operation and support of financial institutions and correspondentbanks is also acknowledged. I will be failing in my duty without acknowledging the supportof our esteemed customers and all other stakeholders for their continued patronage andexpress my deep appreciation to each employee of the Bank for their dedication in takingthe Bank to a greater height.

Thank you very much.

Place: Mumbai

(D. Sarkar)

Date: 26.06.2013

Chairman & Managing Director