Unsecured book growing by 35%; on track to bring GNPA below 6%: Union Bank
In an exclusive interview with CNBC-TV18, Nitesh Ranjan, the Executive Director of Union Bank of India, said the bank is adopting a prudent approach, aiming not to accumulate excess deposits. He highlighted a strategic move to lower bulk deposits and certificate of deposits from the levels seen in March 2023.
Union Bank of India is all set to meet its revenue guidance of 10-12% for the year, said Nitesh Ranjan, the bank's Executive Director.
"Loan book is pretty healthy and particularly a few segments, such as gold loans and education loans, have shown a commendable growth rate. We are confident that we will be able to achieve the guidance level of 10-12%," he told CNBC-TV18.
The bank posted stellar second-quarter numbers with net profit rising 90% year-on-year (YoY) to ₹3,511.4 crore.
Ranjan said the bank is adopting a prudent approach, aiming not to accumulate excess deposits. He highlighted a strategic move to lower bulk deposits and certificate of deposits from the levels seen in March 2023. This reduction is part of the bank's commitment to minimising the cost of funds, thereby enabling it to maintain higher net interest margins (NIMs).
The bank is on track to achieve asset quality guidance of below 6% gross non-performing assets (GNPA) and net non-performing assets below 1%.
Around 1.4% of the bank's total book is contributed by unsecured loans which Ranjan said is doing well. Unsecured retail is growing at 35% on a YoY basis.
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The CASA (current account savings account) deposits registered a 4.45% year-on-year increase. As of September 30, 2023, Union Bank of India's total deposit base was at ₹11,37,628 crore. The overall business of the bank exhibited strong growth, rising by 9.24% year-on-year. This growth is reflected in the 9.50% year-on-year increase in gross advances and a 9.04% year-on-year expansion in total deposits.
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(Edited by : Shweta Mungre)
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