Union Bank to set up retail outlets

Union Bank of India is setting up retail outlets across the country in a bid to ramp up its retail portfolio. The public sector bank would set up 10 outlets by March-end on a pilot basis across Mumbai, Delhi, Kolkatta, Bangalore, Hyderabad, Pune and Ahmedabad among others.

The stores, which will have no licences and function as marketing offices, will be manned by marketing officers.

"The set-ups will sanction all retail loans but disbursement will be from branches. Therefore, the outlets will located in the proximity of branches," said a bank official.

State Bank of India, Dena Bank, UTI Bank, and Development Credit Bank are the other players to have adopted this model.

The bank aims to grow its retail book to Rs 9,600 crore by March 2005 from the current Rs 8,000 crore. Like most other banks, the thrust will be on home loans.

The bank has targeted total advances of Rs 40,000 crore by March 2005, up from Rs 37,500 crore as on December 31, 2004. In the first nine months, advances had grown by Rs 6,600 crore, of which Rs 2,500 crore was on the retail book.

In the third quarter, Union Bank posted an over 60 per cent drop in net profit to Rs 59.07 crore against Rs 150.04 crore in the corresponding quarter of the previous year.

The drop in profit was on account of the one-time transfer of securities that the bank undertook to shield its investments form interest rate risk and a higher-than-expected wage hike.

During the third quarter, net interest income had grown by 28 per cent to Rs 579.58 crore (Rs 452.88 crore), while other income went up by 7 per cent to Rs 191.36 crore (Rs 178.64 crore).