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| Union Bank targets Rs 25,000-cr loan syndication in FY10 |
| Press Trust of India / Mumbai Jun 04, 2009, 13:45 IST |
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Banking upon India's economic recovery, state-run Union Bank of India aims to step up its participation in syndicated loan market, targetting a volume of Rs 25,000-crore in FY 10, a six-fold increase from the current year.
The lender, fifth largest among Indian public-sector banks, has been part of 25 deals in the last eight months, which amounted to Rs 4,400-crore, Union Bank of India CMD, M V Nair said today.
"There is a revival seen in the syndicated loan market in the past few months and we aim to be part of deals worth Rs 25,000-crore in the next one year," Nair told PTI.
The lender launched its syndicated loan segment eight months back and has chalked out business strategies to figure among the top three players in the segment in the next three years.
"There was a perception that Indian public-sector banks are incapable to fund large-scale acquisitions. Today, Indian PSBs have enhanced their skills in all segments. Union Bank would like to be very active in the syndication loan market," Nair said.On the recent RBI directive on restricting banks not to give guarantees on corporate bond issuance, Nair said it will not have large-scale implication with UBI, as the lender is not active in that area.
Syndicated loan volume in the domestic market declined by nearly 46 per cent in the nine months ended September last year compared to the year-ago period, from around $30-billion to around $15-billion, according to Bank of America estimates.
India's largest bank SBI and IDBI bank are among the leading players in the segment. SBI has been part of many large loan syndications including the $3-billion loan for Tatas to fund the Jaguar and land Rover acquisition.
Union Bank of India posted Rs 1,727-crore net profit in FY09 as against Rs 1,387-crore in the year ago period.
Net interest margin of the bank, during the period, improved to 3.24 per cent as against 2.93 per cent in the year-ago period.
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