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Analyst Meet / AGM - Analyst Meet

Restructuring pipeline stands at Rs 1550 crore for quarter ending March 2015

Union Bank of India

27-Jan-2015, 09:32
Union Bank of India conducted the analyst meet on 27 January 2015 to discuss financial performance for the quarter ended December 2014 and the prospects of the bank. Arun Tiwari, Chairman and Managing Director of the Bank addressed the meet:

Highlights:

As per the bank, the green shoots of the economy recoveries are visible. All economic indicators are in comfortable zone.

Bank has maintained the stance of focusing on consistency of performance figures.

Bank targets deposits growth of 9-10% for FY2015, while focuses on strong saving account deposits mobilization.

Bank has reduced the share of high cost deposits to 8.5% at end December 2014 from 10.1% at end December 2013. Bank has also cut the cost of high-cost deposits to 9.25% in Q3FY2015 from 9.38% in Q2FY2015.

The cost of term deposits has declined to 8.74% in Q3FY2015 from 8.8% in Q2FY2015. The cost of certificate of deposits has also declined to 8.85% in Q3FY2015 from 9.19% in Q2FY2015.

Bank is focusing strongly on capital conservation. In the last nine months, the efforts have helped to add 22-23 bps to the Capital Adequacy Ratio.

As per the bank, the ploughing back of profits for nine months ended December 2014 would add 56 bps the Capital Adequacy Ratio.

Bank has received the QIP issue approval for Rs 1386 crore. However, the bank would wait for appropriate time and price for the QIP issue.

Bank did not conduct any sales of assets to the Asset Reconstruction Companies (ARCs) in Q3FY2015. The outstanding securities receipts books stood at Rs 638 crore at end December 2014.

Fresh slippages of advances to the NPA category surged to Rs 1738 crore in Q3FY2015. About Rs 1300 crore of fresh slippages were in the account with exposure above Rs 1 crore. Meanwhile, three accounts contributed fresh NPAs worth Rs 700 crore. Two of these accounts belonged to sugar sector and one to the construction sector.

Bank has conducted fresh restructuring of Rs 1212 crore in the quarter ended December 2015. Bank has restructuring pipeline of Rs 1550 crore for quarter ending March 2015.

The share of top 20 advance account has declined to 8.4% at end December 2014 from 10.4% at end December 2013. Meanwhile, the share of top 10 industries has declined to 31.4% at end December 2014 from 33% at end December 2013.

The share of unsecured advances has also declined to 1.5% at end December 2014 from 43% at end December 2013.

Bank is focusing on augmenting non-interest income, while also proposes to control employee related expenses.

Bank has opened about 35 lakh under Pradhan Mantri Jan Dhan Yojana. About 80% of these accounts are zero balance accounts.