Union Bank of India's Q1 profit under pressure

"Our performance in the first quarter was not so good. However, we are quite optimistic about clocking a healthy growth in operating profit," the bank's Chairman and Managing Director M V Nair, told reporters on the sidelines of a seminar here today.

The bank was also confident of maintaining its net interest margin (NIM) at 2.8 per cent in the period, Nair said.

 

With sufficient demand for credit emnating from its corporate customers, the bank was aiming for 18-20 per cent growth in this portfolio this fiscal, he said. Corporate advances contribute about 35 per cent to UBI's total portfolio.

The lender is also optimistic about a 20-22 per cent growth in its advances, alongwith a 23 per cent growth in deposits, Nair said.

UBI had recently hiked its Bench Mark Prime Lending Rates (BPLR) by 0.5 per cent while simultaneously jacking up its deposit rates by 0.25 to one per cent across various tenures.

The bank is unlikely to pass on the hike in lending rates to its existing home loan borrowers. However, new borrowers will have to pay a higher interest, he said.

The bank aims to increase its current and savings account deposits in the approaching quarters, Nair said.

"The core constituent in any bank's business is its deposits. We are looking at enhancing our CASA base and are keen to safeguard the depositor's interests, he said.