PSU banks, Allahabad Bank and UCO Bank have opted to focus more on retail lending portfolio in this fiscal. With the arrival of base rate, the banks have elected to concentrate more on cheap deposits and to raise the portion of retail loans as a part of the overall loan book of the banks, according to their top officials.
Allahabad Bank is planning to disburse Rs 5,000 crore in home loans, education as well as car loans in the present fiscal. The bank has reported 35.18% increase in net profit on a y-o-y basis at Rs 347.14 crore.
J.P. Dua, chairman and MD of Allahabad Bank said, “By the end of June this year, our retail loan outstanding stood at Rs 10,517.77 crore, up 25.98 per cent from Rs 8,348.96 crore at the end of June 2009. We aim to take it to Rs 14,000 crore by March 2011, an increase of 39 per cent”.
In the 1st quarter in this fiscal the bank’s retail credit offtake was Rs 671.83 crore. Total business went up by 22.36% to Rs 1,84,039 crore.
UCO Bank has a relatively smaller retail loan book amounting to Rs 9,273 crore. Ajai Kumar, executive director of Uco Bank, said, “Currently, retail lending is only 13 per cent of our total advances and we are aiming to increase its share to at least 20 per cent by the end of the current financial year. We expect the advances to grow by 25 per cent”.