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Analyst Meet / AGM - Analyst Meet

Targets advances growth of 10-12%, expects to improve NIM of 2.9% in FY2015

Union Bank of India

09-May-2014, 02:25
Union Bank of India conducted the analyst meet on 08 May 2014 to discuss financial performance for the quarter ended March 2014 and the prospects of the bank. Arun Tiwari, Chairman and Managing Director of the Bank addressed the meet:
Highlights:

Advance book of the bank expanded 11% to Rs 234332 crore at end March 2014, driven by higher growth in the agriculture, retail and MSME credit.
CASA ratio of the bank increased to 29.5% at end March 2014 from 28.8% at end March 2013.
Outstanding standard restructured advance book of the bank stood at Rs 12353 crore at end March 2014. The restructuring pipeline of the bank stands at Rs 1700 crore at end March 2014.
About Rs 10000 crore of advances are in the SMA 1 & 2 category together, which requires attention to avoid slippages to NPA category.
Bank sold about Rs 325 crore advances to asset reconstruction companies in Q4FY2014. The outstanding securities receipts book of the banks stands slightly above Rs 200 crore.
Bank proposes to improve the NIM to 2.9% in FY2015 from 2.56% in FY2014.
Bank expects the fresh slippages of loans to ease in FY2015, which would avoiding interest reversals and support NIM improvement.
Bank proposes to reduce the GNPA ratio from 4.08% at end March 2014 to 3.75% by end March 2015.
Bank has targeted the advances growth of 10-12%, while deposits are expected to increase 9-10% in FY2015.
Bank has headroom for raising of Rs 4000 crore of Tier I capital.
As per the bank, about 80% of the AFS book is interest sensitive.
Priority sector lending of the bank has increased to 37% at end March 201 from 35% at end March 2013.
Bank has added 360 branches in FY2014, while it proposes to add above 300 branches in FY2015. Bank is in the process of setting up of branch offices in Sydney and Antwerp and subsidiary in London.
Bank has continued to make provision for wage revision at Rs 15 crore per month from November 2012. Bank has assumed the wage revision rate of 10-12%.