Union Bank

A large part of this came from the banks better realisations on investments, which increased from 11.92 per cent to 12.10 per cent. Investments increased by Rs 1,161 crore.

The banks reliance on interest-based income rose from 91.34 per cent to 92.05 per cent. The contribution of non-fund based income has dropped, possibly because of a stable rupee and the slack in foreign trade leading to fewer letters of credit and trade bills. Despite Union Bank reducing its dependence on high cost certificates of deposits by Rs 1,800 crore, cost of deposits climbed from 7.95 per cent to 8.44 per cent. The share of low cost savings and current account deposits increased marginally, which means that the fresh deposit accretion at the bank has been at the higher end of interest rates, for longer maturities.

 

Union Bank is perhaps the only bank to have made full provisions even for advances below Rs 25,000. Even so, the ratio of NPAs to total assets was only 6.9 per cent, compared with SBIs 7.3 per cent. It is, however, surprising that the bank should rule out entry into the capital market because its funds position is comfortable. Its capital adequacy at 10.53 per cent may be satisfactory at the moment, but could turn out to be the constraining factor if credit growth picks.