State-run United Bank of India is planning to open around 240 branches by the next financial year across the country for more pan-India presence in order to improve its credit-deposit (CD) ratio. The Kolkata-based lender, which currently has around 60% of its branches in the Eastern region, is aiming at greater presence in the Central and Western parts of India.
“We have more concentration in the Eastern region, but this has created more liability rather than asset building. We have a plan for more pan-India presence to improve our CD ratio,” United Bank of India managing director and chief executive officer Pawan Bajaj told reporters at an interactive session, organized by Merchants’ Chamber of Commerce & Industry on Monday.
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“We have a plan to open 51 branches by March, 2017, of which 10-12 branches have already been opened,” Bajaj said, adding the bank was also planning to set up additional 200 branches in the next financial year.
“We are not very strong in Central and Western parts of the country. Thus, we shall open more branches there,” he informed. United Bank of India’s branch network stood at 2011 as on March 31, 2016.
Bajaj said although his bank saw huge deposit growth post-demonetisation, its loan growth would be muted for this fiscal due to low credit offtake. “We are not finding the way to lend. So, we cannot expect to clock a business growth of 18-20% this fiscal…from October, 2016 lending figures are flat.”
He said United Bank was focussing on to step up lending to MSME and other small loan segment. “We have not seen any stress in small, retail and MSME loan due to the cash-crunch situation post demonetisation,” he stated.
Bajaj said his bank saw a successful resolution case under the Scheme for Sustainable Structuring of Stressed Assets (S4A) for one account, for which its exposure was under a consortium of banks. He, however, declined to divulge details about this stressed asset restructuring.
During the September quarter this fiscal, United Bank’s non-performing assets (NPAs) in absolute term had surged by over 82% y-o-y to Rs. 11134.47 crore from Rs. 6112.21 crore in corresponding period a year ago. On a quarter-on-quarter basis, gross NPA rose over 10% from Rs. 10116.13 crore in the June quarter. Its gross NPA as a percentage of total loans rose to 16.26% in the second quarter from 8.90% a year ago.
