NPA stress: Union Bank asks staff to step up recovery
The focus would remain on asset quality even as the bank grew advances by 9% to Rs 3 lakh crore at the end of March, said chairman Arun Tiwari.
Recovery helps banks in freeing up capital while the government has limitations in infusing funds in state-run banks on a continuous basis.
In a communication addressing employees on the first day of the new fiscal, Tiwari said the focus would remain on asset quality even as the bank grew advances by 9% to Rs 3 lakh crore at the end of March.
“Banking sector is a mirror image of larger happenings in the economy . With economy on the mend, there will be opportunities aplenty , particularly in financing consumption, housing, and infrastructure," he said.
“Asset quality strains will ease with debt-servicing improving. We should remain watchful, however, and double the intensity of efforts in recoveries and upgradation."
Union Bank was sitting on gross NPA of Rs 32,400 crore at the end of December, which was 11.7% of the total advances. There was an addition of Rs 10,000 crore of fresh NPAs during the period while it managed to reduce NPAs by Rs 2,061 crore in the first nine months to December 2016.
The bank recovered Rs 855 crore of loans, upgraded loans worth Rs 658 crore and has written off Rs 548 crore in this period.
Union Bank is looking to focus on retail, agriculture and MSME led asset growth and scale up digitisation to compete with rivals and the new entrants.
Tiwari said advances crossed Rs 3 lakh crore while deposits exceeded Rs 3,78,000 crore, with annual growth rate of over 9% and 10% respectively. CASA ratio stood at 34.4% compared to 32.4% a year ago.
The bank's shares closed 0.32% lower Monday to Rs 155.45 on BSE.