We plan to open offices in 7-8 new countries: Archana Bhargava

Interview with Chairperson & MD, United Bank of India

Archana Bhargava, the new chairperson and managing director of United Bank of India, says she will focus on loan recoveries, increase branch network and expand the bank’s presence abroad. In her first day at the bank’s Kolkata headquarters, she spoke to Somasroy Chakraborty on future plans. Excerpts:

How do you plan to stem the deterioration in United Bank of India’s asset quality?
It is true that we have taken a hit on a few large corporate accounts. It is not because of any wrong handling by the bank but on account of the uncertain environment. These accounts are also borrowers of several other banks. There is a mechanism through which we want to improve our credit quality. We plan aggressive credit expansion in the current year so that the percentage of non-performing assets (NPA) is reduced. Simultaneously, we will focus on recoveries and one-time settlements. The government has come out with extensive restructuring plan for discoms and with the reforms in power tariffs we hope we will be able to reduce our non-performing loans. We will like to bring down our net NPA ratio below two per cent by March 2014.

How is the loan restructuring pipeline?

We have restructured most of the accounts. A few accounts are there and we are working out ways to rehabilitate them.

You mentioned the bank will aim to accelerate its credit growth. What are the targets that you have set for this financial year?
We are aspiring to 25 per cent growth in credit. Only if we aim for a high figure will we be able to achieve good growth. Our average (annual) growth has been 17 per cent in the past three years. We will concentrate on retail lending. Education loans will also be a focus area.

How do you plan to achieve this growth?
To take the bank to greater heights, we will focus on expanding the branch network. We plan to add 250 branches in the current financial year and aim to have 30 million customers in our fold. Currently, we have a little over 1,700 branches and 25 million customers. The new branches will be predominantly in un-banked areas. Some of the branches will also be in high potential metro centres where we see good business growth. The brick and mortar expansion in branches will also be accompanied by increase in the number of ATMs. We also plan to have specialised branches targeted at the new generation and looking to set up e-lounges in five locations. These efforts will hopefully give us good results.

What is your hiring target?
We plan to recruit around 2,000 people in the current financial year. Around 20 per cent of our new recruits will be professionals — engineers, chartered accountants and legal experts. We now have 16,000 employees, but around 1,000 people will be retiring this year.

Do you plan to expand operations abroad?
We have a representative office in Dhaka and one in Myanmar. The trade opportunities in Myanmar are huge and we will try to upgrade it into a regular office. In addition, we are exploring opportunities in certain virgin territories like South Africa and Mexico. We will also evaluate opportunities in BRIC (Brazil, Russia, India and China) nations. We will need permission from the Reserve Bank of India and the host country. We plan to apply for seven-eight locations. The move will help us expand our non-resident deposit base, grow our remittance business and improve our brand visibility.

Do you plan to revive the bank’s rights issue plan?
We plan to apply to the government in the next fortnight. We do not envisage any problem in getting the funds. The government had already come out with a plan and injected capital in some of the peer banks.

The funds are set aside and once we decide on the pricing, we will go ahead with the rights issue.

How much money you plan to raise?
I will like to get as much as I can.