The state-run lender Union Bank of India today said its total business since inception will soon cross the Rs 3-lakh crore-mark, thus joining the elite league of State Bank of India (SBI), Bank of India (BoI), Bank of Baroda (BoB) and Punjab National Bank (PNB).
The bank expects to cross Rs 3-lakh crore business by the June quarter of this fiscal as the growth in its key business verticals of small and medium enterprises, retail and agriculture are poised to continue on the back of strong economic recovery, Union Bank of India Chairman and Managing Director M V Nair told PTI today.
Union Bank has targeted a credit growth target of 25 per cent in the current fiscal, he added.
At present, state-run banks which run business over Rs 3-lakh crore are the SBI, BoI, BoB and PNB.
As of now, loans to small firms, agriculture and retail together contribute close to 50 per cent of the total advances of Union Bank, with both MSMEs and agri loans sharing close to 19 per cent each.
"We have already reached Rs 2.91-lakh crore as of end last fiscal and is confident of a very good growth in the current fiscal. This year the growth in loans and deposits has been projected at around 25 per cent," Nair said.
Despite challenging market conditions, the bank's total advances grew by an impressive 23.3 per cent in the just-concluded fiscal, to Rs 1,21,000 crore as of end March, way ahead of many of its competitors including the State Bank, which has estimated a credit growth of 16-18 per cent.
"We have seen a very healthy credit growth in the year just ended at a rate of over 23 per cent. Moving ahead, the focus will be equally on both the retail and wholesale portfolios. Currently, home and auto loans contribute around 12 per cent of our total loanbook," Nair said.
In the just-concluded fiscal, Union Bank's deposits went up by nearly 23 per cent to Rs 1,70,000 crore, of which the proportion of current and savings account deposits grew by 29 per cent to Rs 53,800 crore. CASA (current accounts and savings accounts) contributed 31.68 per cent of the total deposits as on March 31, 2009 compared to 30 per cent in the year-ago period.
"The growth in advances, across the industry is estimated to be around 16 per cent and in the deposits it is pegged at 18 per cent. Compared to this, our numbers appear phenomenal. We have set an objective to consistently grow above the industry by 5 per cent," Nair said.
Recently, UBI and the Belgium-based KBC Asset Management announced plans to jointly invest around Rs 300 crore in a mutual fund joint venture--Union KBC Asset Management, in which Union Bank holds 51 per cent stake and KBC 49 per cent.
The JV is expected to get the final approval in two to three months and to launch its first fund in the last quarter of this calendar year, Nair said.
