New chiefs of 2 PSU banks take charge

Union Bank of India said Rajkiran Rai G has assumed charge as Managing Director & CEO.

Prior to his elevation as MD & CEO of Union Bank of India, Rai was Executive Director of Oriental Bank of Commerce. He started his career in 1986 as an Agricultural Finance Officer in Central Bank of India.

Rai has been appointed by the government to head Union Bank of India for a period of three years from the date of his taking over charge of the post or until further orders, whichever is earlier, according to a finance ministry notification.

New chief assumes charge at Syndicate Bank

Syndicate Bank, in a statement, said Melwyn Rego has assumed charge as Managing Director & CEO.

Prior to joining Syndicate Bank, Rego was MD & CEO of Bank of India. He started his career with IDBI Bank Ltd in 1984 and rose to the position of Deputy Managing Director.

Rego will be at the helm of the bank till the remainder of the term up to August 13, 2018, according to a finance ministry notification.


Source : Thehindubusinessline

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Union Bank net zooms 77% at Rs. 658 cr

Union Bank of India today reported a massive jump of 77 per cent in its net profit to Rs. 658 crore for the September quarter.

The bank had reported net profit of Rs. 371 crore in the July—September quarter of the previous fiscal.

Global business grew by 7.4 per cent to Rs. 5,84,687 crore as on September 30 of the current fiscal, while deposits soared by 10.2 per cent to Rs. 3,30,665 crore, Union Bank said in a statement.

Advances grew by 3.9 per cent to Rs. 2,54,022 crore.

Net interest income for July—September quarter of 2015—16 increased by 0.8 per cent to Rs. 2,102 crore from Rs. 2,085 crore in the same quarter of last fiscal.


Source : Thehindubusinessline

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Union Bank to buy KBC Asset Management’s 49% stake in MF jt venture

Union Bank of India and KBC Asset Management NV have reached an agreement on the sale of KBC Asset Management’s 49 per cent stake in Union KBC Asset Management Co Pvt Ltd to the bank.

The public sector bank, however, did not disclose the deal size.

The joint venture was established between both companies in 2009.

In the July-September 2015 quarter, Union KBC Asset Management had average assets under management aggregating Rs. 2,672 crore.

Union Bank, in a statement, said the transaction, which is subject to regulatory approval, will have no impact on the joint venture’s client positions and product portfolio.

Arun Tiwari, Chairman & Managing Director of Union Bank of India, said this transaction reaffirms Union Bank’s vision to provide all financial solutions under one umbrella, which apart from banking products and services, also includes life insurance products through its joint venture Star Union Dai-ichi Life Insurance Co Ltd. and mutual fund products through Union KBC AMC to its customers.

Tiwari said his bank is committed towards offering portfolio of services to the investors under its own brand.


Source : Thehindubusinessline

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UBI’s Rs1,300-cr QIP likely next quarter

Union Bank of India (UBI) is likely to mobilise about Rs.1,300 crore through Qualified Institutional Placement (QIP) in the first quarter of the next financial year.

“We have got all approvals from the Centre and the Reserve Bank of India (RBI) but are waiting for market conditions to improve,” Executive Director K Subrahmanyam told newspersons after inaugurating an industrial finance branch here on Friday.

In addition, the bank has headroom for Rs.4,000 crore additional tier-I capital. “We are also not in the immediate need of capital,” he added. When asked whether there was any increase in credit demand after the recent easing of key policy rates by the RBI, he said, “It has not picked up and things might change in the first quarter of the next financial year.” On future plans, the official said that UBI was in the process of opening a branch in Sydney and was awaiting licence. A couple of weeks ago, it opened its subsidiary in London.


Source : Thehindubusinessline

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Union Bank to open branch in Sydney

The Union Bank of India (UBI) will open its branch in Sydney by the end of this month, a top official has said.

"We are going to open a branch of the bank at Sydney on January 30. The bank also plans to open branches in Africa for further strengthening its global footprint," UBI Chairman and Managing Director Arun Tiwari told PTI.

Presently, the bank has a representative office in Sydney.

UBI recently opened a branch at Antwerp in Belgium. Apart from that, the bank has branches in Dubai, Hong Kong and London and representative offices in Beijing, Shanghai (both in China) and Abu Dhabi, he said.

Tiwari was speaking on the sidelines of a function to inaugurate a cash depositing kiosk here today.

"We will put up 500 more such machines across India which will be very useful to the customers," he said.

"The Union Bank of India has come up with a plan to strengthen its loan portfolio in retail, agriculture and MSME (micro, small and medium enterprises) sectors in 2014-15, thanks to the initiative taken by the Government of India and Reserve Bank," Tiwari said.

"Our focus for this year is on the RAM (retail, agriculture and MSME) sectors and we hope that the execution of our plans during the year will boost demand for industrial credit," he said.

Union Bank has the vision of becoming the top choice of customers by building beneficial and lasting relationship with them through a process of continuous improvement. The bank aspires to be the no. 1 retail bank in customer service excellence by 2020, Tiwari said.

The global business of the bank as on December 31, 2014 stood at Rs 5,34,051 crore, with deposit of Rs 3,02,782 crore and advances of Rs 2,31,269 crores. UBI had capital adequacy ratio of 10.30 per cent at the end of December 2014.

As part of pursuing the goal of financial inclusion in Gujarat for 2014-15, the bank has adopted 155 girl children in Vadodara region and paid Rs 4,000 per girl child, he said.

Under the Pradhan Mantri Jan Dhan Yojna, the bank has opened 2,43,393 accounts till January 21 in the state with a balance of Rs 5.85 crore and issued 1,79,624 rupay debit cards, he said.

"We have made provision for extra burden that is to be borne by the bank following the proposed hike in salaries of employees after finalisation of wage revision settlement, for which negotiations are taking place between the Indian Banks Association and the United Forum of Bank Unions," he said.

Source : Economic Times

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Union Bank home loan offer

Union Bank of India has liberalised its home loan scheme whereby it will give additional loan to customers, who wish to shift their housing loan to the bank, for further construction or renovation. Further, since customers, who have constructed/purchased a dwelling unit with a loan from the bank, may incur various miscellaneous expenses while shifting to the new house, Union Bank will make personal loan available with liberalised norms, the bank said in a statement. Further, to promote usage of renewable sources of energy, the public sector bank said it will include the cost of solar power panel in the cost of housing project. Home loan repayment will be considered up to the age of 70 years by including the pension income of the borrower.


Source : Thehindubusinessline

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Union Bank Q2 net up 78% at Rs. 371 cr

Union Bank of India reported a 78 per cent jump in net profit during the July to September period at Rs. 371 crore helped by write-back, lower provisioning and healthy non-interest income.

“The sharp increase in profit was due to Rs. 140 crore received by the public sector bank as write back of income tax,” said Arun Tiwari, Chairman and Managing Director, Union Bank of India.

Net interest income (different between interest income and expended) increased by a moderate 7 per cent to Rs. 2,085 crore as against Rs. 1,954 crore in the same quarter last year. However, non-interest income for the second quarter rose 33 per cent to Rs. 812 crore from Rs. 611 a year ago.

During the quarter provisions declined 16 per cent to Rs. 785 crore from Rs. 937 crore in the second quarter FY14.

Tepid growth

As on September 30, 2014, domestic advances grew 9 per cent to Rs. 226,011 crore, while domestic deposits rose 4 per cent.

“Our growth came from retail, agriculture and MSME, while corporate growth was flat as business growth remains subdued,” Tiwari said.

He added that the credit and deposit growth is likely to be at 11-12 per cent and 9-10 per cent for FY15, while (gross) NPAs will be contained at 4 per cent.

Gross non-performing assets (NPAs) worsened to 4.69 per cent as on September 30, 2014 as against 3.64 per cent as on September 30, 2013. Net NPAs also increased to 2.71 per cent from 2.15 per cent.

Though the bank made recovery of assets worth Rs. 516 crore, the slippages into bad loans were at Rs. 1,968 crore.

Net interest margins dropped to 2.56 per cent from 2.58 per cent in September quarter last year due to proportionately higher cost of funds. “We target NIM of 2.8-2.9 per cent for the full year,” Tiwari said.

The shares of Union Bank of India ended at Rs. 225.50, 0.58 per cent higher over its previous close on BSE.

Source : The Hindu

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Union Bank opens 18.4 lakh SB accounts under Jan Dhan Yojana

Union Bank of India has so far opened 18.40 lakh basic savings bank deposit accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY), according to Chairman & Managing Director Arun Tiwari.

The PMJDY, which kicked off on August 15, is a national mission for financial inclusion to ensure that the weaker sections have access to financial services — banking/ savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner.

“On an average we have mobilised deposits amounting to about Rs. 950 in each of these accounts opened under PMJDY…

“People are realising the importance of saving money in a bank and earning interest,” said Tiwari on the sidelines of a press meet to announce the launch of the bill payment service through the any bank mobile banking application for MTNL subscribers.

A back-of-the-envelope calculation shows that Union Bank would have mobilised about Rs. 175 crore by way of deposits under the PMJDY.

PMJDY focuses on coverage of households as against the earlier financial inclusion plan (FIP) which focused on coverage of villages. It focuses on coverage of rural as well as urban areas.

The earlier FIP only targeted villages with a population of over 2,000, while under PMJDY the whole country is to be covered by extending banking facilities in each sub-service area consisting of 1,000–1,500 households, such that the facility is available to all within a reasonable distance, say about 5 km. 

Source : The Hindu

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Jan Dhan Yojana: Union Bank engages Fino PayTech in Gujarat

Union Bank of India (UBI) has engaged Fino PayTech in more than 400 villages in Gujarat to identity and enrol unbanked population under the Prime Minister’s Jan Dhan Yojana (PMJDY).

Already, UBI has enrolled more than 9,000 rural customers under the scheme in 41 villages of Gujarat.

With the latest numbers reporting four crore accounts opened under the PMJDY, there is growing concern over a single person opening multiple accounts. Following a directive from the RBI, banks have started to undertake massive exercises to identify and enrol the right persons eligible for a bank account under the scheme.

Taking the lead in Gujarat, UBI flagged off its national financial inclusion project in the districts of Rajkot, Bhavnagar and Junagadh where camps were held in 44 villages. A total of 9,500 hitherto unbanked people in these villages have been enrolled for new bank accounts.

Payments technology firm and leading business correspondent (BC) network operator, Fino PayTech is UBI’s partner in this endeavour. Together they intend to extend the project further in 400 more villages through BC network in Rajkot, Ahmedabad, Mehsana, Surat and Vadodara districts, Vikaas Goel, Vice-President, Fino PayTech, said on Monday.

Explaining the strategy for taking forward banking in rural areas, he said business correspondents brought about paradigm shift in the way rural banking was being conducted. The PMJDY further emphasises their strategic role in making financial inclusion possible. “To penetrate further in rural Gujarat we plan to hire over 200 agents who will identity and enroll the unbanked population for new bank accounts under the scheme.”

“Identification of an eligible household for a bank account is a major development compared to earlier efforts. We will undertake surveys to identify such households prior to enrollments. This will ensure quality of bank accounts and reduce wastages in terms of effort, cost and duplication,” added Goel. 

In addition to enrolling new bank accounts, the agents will also service the customers’ banking needs by providing access to various products such as savings, credit, insurance, RD/ FD and remittances.

Apart from Gujarat, Fino is working with UBI on the PMJDY in UP, MP, Bihar, Odisha and Jharkhand, among other states, enrolling over 3.75 lakh people for new bank accounts.

Fino PayTech is micro payments solutions provider to banks, financial institutions and MFIs. Together with its service delivery network of 28,000 transaction points it facilitates access to financial services to the unbanked and un-served segments of the population. It services over 2.80 crore active banking customers spread across India, providing a range of financial services like savings, remittance, insurance, credit etc.


Source : The Hindu

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Arun Tiwari is new CMD of Union Bank

Public sector lender Union Bank of India said Arun Tiwari assumed charge as its new Chairman & Managing Director.

Tiwari, who has over 30 years of experience, started his banking career with Bank of Baroda and was an executive director at Allahabad Bank prior to his new job.

An MSc in chemistry, Tiwari set up the operations of Bank of Baroda in Kuala Lumpur and Singapore and played a key role in the bank’s Project Navnirman and Project Sparsh initiatives.

As an executive director at Allahabad Bank, Tiwari was a member of audit, customer service, IT, management and risk management committees.

Source: thehindubusinessline

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Union Bank raises Rs 2,000 cr via tier-II bonds

Union Bank of India said that it has raised additional capital of Rs 2,000 crore through the issue of unsecured redeemable non-convertible tier-II bonds.

The bonds carry a fixed coupon rate of 9.8 per cent per annum payable annually having a tenor of 10 years, the bank said in a statement.

At 3 p.m., the bank shares were trading at Rs 118.85, down 1.82 per cent on the BSE.

Source: thehindubusinessline

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Union Bank Q2 net profit dives 62%

Union Bank of India’s second quarter net profit more than halved as it made higher provisions to hedge against the rising non-performing assets.

In the July to September quarter, the bank made a net profit of Rs 208 crore against a net profit of Rs 555 crore, a year ago.

The Mumbai-based bank’s provisions increased 92 per cent to Rs 937 crore (Rs 487 crore).

Net interest income, the difference between interest earned and expended, increased 5.62 per cent to Rs 1,954 crore during the quarter.

D. Sarkar, Chairman, Union Bank of India, said the bank had to provide more as slippages increased from the corporate segment. He said that about six to seven corporates have been unable to service their loans as they have been stung by project delays, environmental clearances, among other things.

The bank had Rs 10,937 crore as outstanding restructured loans as on September 30, 2013. Sarkar said that as more banks in loan consortiums agree to restructure more accounts, Union Bank will restructure loans worth Rs 3,800-4,000 crore in the remaining part of the year.

Sarkar, while cautioning that the industry is still suffering, said the bank will maintain its gross non-performing asset levels at 3.5 per cent of total advances for rest of the year. In the reporting quarter, the public sector bank posted a gross NPA level of 3.64 per cent.

The bank expects that it will maintain a net interest margin of 2.6 per cent for the reminder of the year.

satyanarayan.iyer@thehindu.co.in

Source: thehindubusinessline

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Union Bank buys 2.47-acre plot

The Union Bank of India has purchased a 2.47-acre plot at the Financial Hub in New Town, Rajarhat, on the north-eastern fringes of the city. The plot will house its zonal administrative office, regional office, and zonal audit office, among others.

The land was purchased from the State Government owned Housing Infrastructure Development Corporation Ltd (HIDCO).

Source: thehindubusinessline

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Union Bank of India plans to raise $500 m abroad

With the Reserve Bank of India doubling the overseas borrowing limit of banks, Union Bank of India is planning to raise about $500 million, according to a top bank official.

The overseas borrowing will be in the form of bilateral loans of one to two year duration. The public sector bank will raise the resources from one of the two international locations — Hong Kong or Dubai, where it has branches.

The bank expects to tie up the funds at a mark-up of less than 2 percentage points over the benchmark Libor (London Interbank Offered Rate).

“But then if you add the swap cost of about 6.5-7.0 per cent, the overall borrowing cost might come to about 8.5-9.0 per cent. This is cheaper than the rupee deposits which we are raising today,” said K. Subrahmanyam, Executive Director, Union Bank of India.

A swap transaction entails the exchange of principal and interest in one currency for the same in another currency with a counterparty.

The bank can put the resources raised to two uses — it can covert them into rupees for domestic lending and also extend pre-shipment credit in foreign currency to exporters, said Subrahmanyam.

ramkumar.k@thehindu.co.in

Source: thehindubusinessline

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Union Bank ups base rate to 10.25%

To protect its net interest margin, Union Bank of India has increased its base rate to 10.25 per cent from 10 per cent. The new rate is effective from September 6, said the bank in a statement.

Base rate is the minimum interest rate below which banks cannot lend. The public sector bank recorded a lower net interest margin of 2.63 per cent in the April-June 2013 quarter against 3.01 per cent in the year-ago period.

Source: thehindubusinessline

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Union Bank raises bar in retail loans push

In the backdrop of banks focussing on retail loans to ride out the current economic slowdown, Union Bank of India has pushed the envelope by extending the maximum age by when home loans can be repaid to 70 years.

The move also comes in the wake of increased life expectancy coupled with senior citizens, especially former Government employees, drawing higher pensions, getting income from post-retirement employment or business.

What this means is that you can decide on taking a home loan (it could be the first, second or third one during your lifetime) even when you are in your 50s, irrespective of whether you belong to the salaried or non-salaried class.

Previously, the bank had pegged the maximum permissible age by when repayment of the last instalment of home loan had to be made for salaried and non-salaried class of borrowers at 60 years and 65 years, respectively.

Extended tenure

As part of its revamped home loan policy, the bank, in a bid to encourage young salaried / self-employed people to have a home of their own, has extended the maximum tenure for loan repayment to 30 years (from 25 years).

The extended tenure was aimed at easing the instalment burden, said Pravin K. Bansal, General Manager, Union Bank.

With house prices remaining high at most metros, the public sector bank has decided to do away with the ceiling on the maximum quantum of loan for purchase of a flat/ house. The quantum of home loan will be based on the repayment capacity of the borrower and margin norms.

Previously, the maximum quantum of loan for purchase of a flat/ house was Rs 5 crore in metros, State capitals and the NCR, Rs 3 crore in urban centres and Rs 1 crore in semi-urban and rural centres.

During the last four years, the Reserve Bank of India’s index of house prices has increased by over 110 per cent (up to January-March 2012-13). The index comprises nine cities — the four metros apart from Bangalore, Ahmedabad, Lucknow, Jaipur and Kanpur.

Union Bank has also relaxed the norms relating to the age of the house that can be financed. Its branches will consider loan applications for purchase of house up to 25 years old (previously it was up to 15 years old).

Further, the regional level credit committee has been empowered to consider loans for houses older than 25 years (previously, older than 15 years).

Bansal said the bank had also set a tight turnaround time for home loans and auto loans at five days and three days, respectively, provided the customer documents were in order.

The aim is to grow the bank’s retail loans portfolio to about Rs 25,000 crore by March-end 2014 against Rs 19,560 crore as at March-end 2013.

Source: thehindubusinessline

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Moody’s downgrades BoB, Canara Bank, PNB

Slower economic growth, deteriorating asset quality and declining margins have prompted Moody’s Investors Service to downgrade the ratings and credit assessments of three major public sector banks — Bank of Baroda, Canara Bank and Punjab National Bank.

The global credit rating agency also changed the financial strength ratings of Union Bank of India to negative.

“The downgrades for Bank of Baroda, Canara Bank and Punjab National Bank, and the negative outlook to Union Bank of India primarily reflect the challenges of the current macroeconomic environment, which have been exacerbated by the depreciating rupee and high levels of inflation,” Moody’s said.

According to the rating agency, the Reserve Bank of India’s measures to support the currency have not reversed its depreciation, implying that interest rates may remain elevated for a longer time.

The deteriorating macroeconomic situation apart, Moody’s pointed to the worsening asset quality at Indian banks, with total non-performing assets and restructured loans rising above 8 per cent of their loan book and loan loss reserves coverage for these impaired loans under 25 per cent as of end-March 2013.

“These problem assets indicate a risk that capital ratios will remain under pressure; a situation which is compounded by the relatively low capacity of the banks for internal capital generation.

“Therefore, given their weak financial performances, several public sector banks have received repeated capital injections from the government in past years,” Moody’s said.

Shares of the four banks fell sharply on Friday. Canara Bank shares ended at Rs 224.15 per share on the BSE, down 9.96 per cent from the previous close, while Bank of Baroda fell 8.5 per cent at Rs 479.10.

Union Bank of India shares fell 5.98 per cent to Rs 112.35 and Punjab National Bank declined 7 per cent to Rs 500.05. The BSE Bankex fell 5.55 per cent to 10,800.62 points.

The benchmark Sensex dropped 3.97 per cent to 18,598.18 points.

deepa.nair@thehindu.co.in

Source: thehindubusinessline

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Rakesh Sethi takes charge as Executive Director, Union Bank of India

Rakesh Sethi took charge as Executive Director at the Union Bank of India on August 5.

He has earlier worked with Bank of India as a General Manager heading the National Banking position in Southern India.

Sethi also headed the Retail Banking division and Marketing Department at the head office.

Source: Financial Express

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New General Manager for Union Bank

Pankaj Sharma has taken charge as General Manager of Chennai Zone of Union Bank of India. This zone comprises Tamil Nadu and Kerala.

As General Manager, he will be in charge of four regional offices each in Tamil Nadu and Kerala, including a branch in Port Blair.

In all, the zone has 422 branches. Prior to the elevation, he was heading the Hong Kong operation of the bank.

Earlier, he has worked in various regions and at the bank’s corporate office, in areas such as Credit, Foreign Exchange and Treasury.

Source: thehindubusinessline

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Union Bank to approach FinMin with fresh capital-raising plan

Union Bank of India, is planning to submit a fresh capital raising plan to the Ministry of Finance “within a couple of days”.

According to Debabrata Sarkar, CMD, though the bank is currently well capitalised, it might have to raise capital to fund its growth needs beyond 2015.

“Our bank will be in a comfortable position in terms of capital till 2015. For the period post-2015, we will require more funds,” Sarkar said here on Friday. He was addressing an interactive session on bank credit organised by the Kolkata-based MCC Chamber of Commerce and Industry.

Meanwhile, he said, the bank witnessed good demand from the agriculture, retail and SME sectors, but demand from the corporate sector has been subdued.

Sarkar also pointed out that improper management of infrastructure projects in the country was hurting the financial stability of the banks. “For example, average maturity tenure of deposits for UBI is 1.7 years. But, an infrastructure project takes no less than 10 years. How can I match my asset and liability?” he asked.

Sarkar confirmed that the bank would not increase interest rates. “We have recently reduced our base rate to 10 per cent (from 10.25). We are not thinking of tinkering with the base rate now,” he said.

ayan.pramanik@thehindu.co.in

Source: thehindubusinessline

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