Union Bank of India foresees an increase in non-performing assets (NPA) in the forthcoming quarters. In fact, the bank has already seen slippages due to its restructured loans. The bank’s chairman and managing director MV Nair said that till December, the bank has seen a 5% reduction in the restructured loan portfolio worth Rs 4,700-crore. He also said that the NPA level is likely to go down further in the subsequent 2 quarters.
However he was optimistic about retaining the bank’s gross NPA level below 2% till the end March 2010. This was stated at the inauguration of a branch at Jangipur in Murshidabad on Sunday. He also said the bank is likely to review its capital raising program after the Budget. The bank is likely to opt for equity method for raising capital.
The CMD said that by December end, the bank had a capital adequacy ratio of 13.76% and the tier-I capital ratio of 8.7%, which the bank intends to retain. The bank’s new mutual fund enterprise in collaboration is expected to begin operational from May.
Besides starting a new branch, Union Bank launched a village knowledge centre at Jangipur. Along with SIDBI, the bank has started a management & skill development institute to provide various financial services.
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