Union Bank of India highlighted its Q4 and Financial year ending March 31, 2018  results with steady growth in Global Business by 6.2% to Rs 722362 crores on March 31, 2018 from Rs 680076 crores on March 31 2017, besides Domestic Business growth by 7.4% to Rs 691533 crores on March 31, 2018 from Rs 644014 crores in the same period last year, according to Rajkiran Rai G, MD&CEO, Union Bank of India,.

CASA deposits increased by 6.9% to Rs 139241 crores qas on March 31, 2018 from Rs 130308 crore on March 31, 2017. Operating Profit was Rs 1890 crores for Q4 FY 2018. However, Net Loss for Q4 FY 2018 stood at Rs 2583 crore including Investment Depreciation of Rs 1120 crore. Net Loss for FY 2017-18 stood at Rs 5247 crore including  Rs 1560 crore of Investment Depreciation and Rs 7326 crores Provision held for 27 accounts referred to National Company Law Tribunal, as per RBI List – I & II.

Asset Quality witnessed Slippages of Rs 10,043 crores during Q4 FY 2018, during which Gross NPAs were 15.73%, Net NPA ratio at 8.42% and Provision Coverage Ratio at 57.16%. Risk Weighted Assets to Gross Advances decreased to 91.2& as on March 31, 2018, compared to 96.5% in the same period last year.

Replying to questions, Rai said the Bank is expecting credit growth of between 6% to 8% this year (around Rs 10,000 crores to Rs 15,000 crores) and has created hubs in 45 centres for MSME processing, besides providing lots of technology initiatives.

Slippages during Q4FY18 involved some chunky accounts including 228 crores in the Retail sector, Rs 757 crores (Agriculture), Rs 1124 crores (Micro & Small) and Rs 7934 crores (Medium & Large). “In the first two quarters, we had concerns on major thermal projects which are not NPAs now, though power projects may disturb us. This year was ‘abnormal’ for us due to over Rs 3,000 crores slippages in this sector. We have shifted out focus from topline to Operating Profits. We are balancing our Assets in such a way that Risk Weight is coming down,” Rai said.

“Recovery, CASA, Profitability are the three pillars for the bank’s future focus. On the rural side, we have created the ‘hub-n-spoke’ model through local level staff and our monitoring cell is from the account sanction level,” he said while pointing out that Recovery in Written-off Accounts grew by 37.69% in FY2018.

He said the bank has become strict in its working due to credit laws that ensure good credit disciplines. Credit underwriting is a must and its quality has improved, he said adding that last year, the bank had recovered Rs 1,000 crores of NPA and Recoveries will come from the NCLT resolutions.

“Write-offs are not planned, but 50% to 60% “Haircuts” are being planned,” he said while highlighting Slippages occurring despite making substantial Provisions. “Our strategy is to clean the books as soon as possible and make adequate Provisions. The Net NPA will be below 6% by March 2019 as the NPA numbers in retail have come down. Recovery teams have been formed and are doing a good job in dealing with small accounts.”

The Bank’s Financial Inclusion efforts included 18,396 villages being covered with 86.22 lakh accounts being opened till March 31, 2018 and Deposits of Rs 1930.6 crore. Around 59% of the bank’s branches are in rural/semi-urban areas, and overseas branches included Hong Kong, Sydney, Dubai and Antwerp besides representative offices in Shanghai, Beijing and Abu Dhabi.