Uti Bank Hires Bcg To Redo Strategies

UTI Bank has appointed the Boston Consulting Group (BCG) to rework its strategies in corporate and retail banking.

UTI Bank chairman and managing director P J Nayak said, the bank has appointed BCG to take a second look at strategies in corporate and retail banking. "We want to increase our competitiveness in both these sectors," he said.

BCG started working with the bank from November 1 and will continue to do so for the next six months.

UTI Bank had recently placed a 26 per cent preferential issue with CDC Capital Partners (formerly known as Commonwealth Development Corporation) at Rs 157.59 crore.

CDC picked the stake through two funds -- South Asia Regional Fund and CDC Financial Services. Nayak denied any acquisition plans in the near future saying, "For the next 12 months we will be focusing only on growth. As long as the sources for growth exist there is no need for any mergers or acquisitions. At present, we are growing reasonably well."

UTI Bank reported a 60 per cent rise in net profit at Rs 56.32 crore for the half year ended September 30.

In the last few months, the bank has also been picking up corporate assets from other banks, institutions and non-banking finance companies (NBFCs).

"We have picked assets from various institutions and NBFCs. However, these assets form only a small amount of the overall assets when compared to the total credit," said Nayak.

UTI Bank picked over Rs 100 crore of assets from Delhi-based IFCI. Market sources added that the bank has been actively picking up assets from NBFCs and the total quantum could be easily over Rs 100 crore.

Some NBFCs have a liquidity problem and have been selling off their portfolio in order to generate liquidity.

The bank is looking at picking up a loan portfolio on the retail side too. It has two strategic alliances -- Integrated Finance and Kinetic Fincap.

These alliances help the bank to acquire retail assets, running the portfolio and also in recovery.