Union Bank to open first foreign branch,increases business target

Kolkata, Feb 22 (UNI)Public sector Union Bank of India which is aiming to take its total business volume to Rs 200,000 crore by March 2008 from Rs 1,34,000 crore now, is all set to open its first overseas branch in Hong Kong before the end of this fiscal year (2006-07).

Speaking to UNI here last night Union Bank General Manager S C Sinha said apart from Hong Kong they had applied to the RBI for opening another full fledged branch in Dubai and two representative offices in Shanghai and Muscat by next year to spread their wings in foreign countries further.

"We are expecting to get the green signal from the RBI as well as from the regulatory authoritities from all the concerend countries soon to this effect", he said adding that the Bank was also on the course of opening a total of 140 branches within the country by this year end to take the total number of branch network to 2270.

Referring to the all round growth of the Bank which had recently introduced a unique retail deposit mobilising scheme by offering nine per cent interest on 400 days fixed deposit with annualised yield touching upto 9.35 per cent per annum, Mr Sinha said since the scheme was launched on February 15 the Eastern Region units alone had mopped up Rs 35 crore.

Asked about the national target of the new scheme, the Union Bank General Manager said "we hope to collect at least Rs 5,000 crore by the end of current fiscal with the target for the Eastern Region remaining someshere around Rs 400 crore'.

He said by March this year though the overall business of the bank was set to cross Rs 1,60,000 crore before reaching the Rs 200,000 crore mark by next year, the Bank was looking for at least 28 per cent growth in deposit mobilisation (Rs 91,000 crore) and 25 per cent in credit disbursement (Rs 70,000 crore) during the same period.

"In terms of retail credit the Bank's main focus was on SME and Home loan sectors where we are expecting considerable growth for some time now", he said to another query.

He said as a result of strict financial discipline the net NPA margin of the Bank had now been brought down to the level of 1.12 per cent. 'We hope to bring it down further to less than one per cent within the next two months'.

Regarding any further possibility of the Bank to approach the capital market to widen its capital base, Mr Sinha replied in the negative. Since the government stake in the bank had already been dilluted to around 56 per cent, there was very little scope for us now to look for the tier One capital.'However, we are looking for the right opportunity to raise about Rs 700 crores through the Tier II route", he said to another query.

Asked about the fate of Union Bank's decision to make forays into the Insurance business through a joint venture with Bank of India and Dai-ichi Mutual Life Insurance Company of Japan with the Union Bank holding 23 per cent stake, Mr Sinha said though the appoinment of a Chief Executive Officer (CEO) and that of the Managing Director had already been finalised, it would take some more time to start the actual business to provide long term growth opportunity, because of some technical reasons.

About the possbility of any merger or amalgamation of some Regional Rural Banks (RRBs) with the Union Bank in line with the steps being taken by some other banks, Mr Sinha again replied in the negative.'We have no such plan in forceable future', he clarified.

About his expansion programme in the Eastern Region, the Union Bank GM said during the current fiscal 12 branches and four ATM counters were opened in five Eastern states Comprising West Bengal, Bihar, Orissa, Jharkhand and the Northeast. 'We are planning to open a few more branches in these states in the coming months too like in several other states, he said.

UNI