Union Bank scales down credit growth

Union Bank of India has scaled down its credit growth in 2006-07 to 16.5 per cent as against 25 per cent projected at the beginning of the year.

Bank Chairman and Managing Director M V Nair said he did not expect any change in the interest rate environment that started in the third quarter. "We had to reduce the balance sheet size as a result of this and the outstanding advances reached Rs 63,000 crore," he said.

The demand for home loan had slowed down significantly in the second half of the last fiscal.

The bank's retail business grew 17 per cent, while the agriculture and small and medium enterprises sectors recorded around 32 per cent growth," Nair said.

On the deposit front, the bank clocked 16 per cent rise at reach Rs 85,200 crore during the period. The bank had projected 20 per cent growth at the beginning of the year.

He, however, did not comment on the growth projections for the current financial year.

Nair said the asset-liability committee of the bank was meeting shortly to know the impact of the latest 50 bps CRR hike by the Reserve Bank of India affected on April 30, 2007.