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Analyst Meet / AGM - Analyst Meet

Proposes to reduce GNPA ratio to 4.75% by end March 2016

Union Bank of India

29-Jul-2015, 09:57
Union Bank of India conducted the analyst meet on 28 July 2015 to discuss financial performance for the quarter ended June 2015 and the prospects of the bank. Arun Tiwari, Chairman and Managing Director of the Bank addressed the meet:
Highlights:

Bank has continued to focus on reducing high cost deposits, which has helped to cut cost of deposits.
Bank has also focused on raising the share of Retail, Agriculture and MSME (RAM) advances, which has increased to 50% of the total advances at end June 2015 from 44% at end June 2014.
As per the bank, there will be three key drivers of the banking sector ahead.
1. Human Capital: Bank has reduced the average staff age from 43 years to 40 during last two years,
2. Digital Platform: Bank has witnessed improvement in share of e-transactions to 60% of total transaction, which is proposed to be improved to 75% in next two years,
3. Equity Capital: Bank is well conserving capital, as RWA growth is much lower than the overall loan growth.
Bank has reaffirmed its guidelines on business targets for FY2016. Bank is hopeful of achieving 10-12% advances growth for FY2016, while the deposits growth target for FY2016 is placed at 6-7%.
Bank proposes to improve CASA ratio to 32% by end March 2016, while expects to improve NIM to 2.6-2.65% by Q4FY2016.
Bank also proposes to reduce the GNPA ratio to 4.75% by end March 2016.
Bank has shareholders approval in place for capital raising of Rs 3700 crore, while it is waiting for right time and pricing.
Fresh restructuring of advances was at Rs 751 crore that is half of the expected level, while slippages from restructured advances book stood at Rs 614 crore in Q1FY2016.
Bank has not conducted any sales of assets to ARCs in Q1FY2016.
Bank has approved restructuring of six accounts with the exposure of Rs 6238 crore under 5/25 scheme.