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Union Bank of India conducted a conference call on 20 July 2024 to discuss its financial results for the quarter ended June 2024. A Manimekhalai, MD&CEO of the bank addressed the call:
Highlights:
The bank has maintained credit growth ahead of deposits. Advances grew 11.5% and deposits at 8.5%. CD ratio stood at 71.8% end June 2024.
The bank is targeting loan growth of 11-13% and deposit growth of 9-11% for FY2025.
The cost to income is expected to be at 45-45.5%.
The bank aims to add 200-250 branches in FY2025.
The fresh slippages of loans are expected at Rs 11500 crore recoveries and upgradations is expected at Rs 16000 crore.
The bank targets to achieve RoA of above 1%.
The GNPA ratio of the bank has declined to 4.54% and expects to reduce it to 4% by end March 2025.
The bank has continued to maintain NIM above 3% at 3.05% against the guidance of 2.8-3.0%.
The bank has been taking initiatives to support growth in deposits and CASA deposits.
The retail wholesale loan mix of the bank was at 56-44 end June 2024.
The bank has approved the capital raising of Rs 6000 crore through mix of equity and debt.
The bank has witnessed moderation in corporate loan growth due to shading of low yield advances.
In the NBFC book, about 99% of the portfolio is rated A and above.
The gold loan portfolio of the bank stands at Rs 78000 crore, of which Rs 78000 crore is agriculture gold loan book. The GNPA in the agriculture gold loan book is negligible.
The fee income of the bank was boosted by PSLC income of Rs 955 crore in Q1FY2025.
As a result of new investment guidelines, the bank has witnessed accretion of Rs 1702 crore its reserves.
The bank does not expect any pressure on NPAs due to recent farm waivers.
The slippage rate of the restructured loan book stands at 36%.
The bank is focusing on controlling NPAs in the agriculture loan book with credit to agriculture investment than crop loans.
The bank expects recoveries in technically written off account pool at Rs 4000 crore.
The credit cost is expected to be less than 1%.
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