The lender is also likely to see some impact in the form of mark-to-market losses on account of various investments, Nair said, without divulging further details.
The bank has targeted a 25 per cent business growth in the present fiscal while its net interest margin (NIM) is expected to be at 2.85 per cent, he said.
Union Bank presently has a deposit base of around Rs 1,07,000 crore while its total advances stand at around Rs 76,000 crore.
The lender has garnered around Rs 6,000 crore from its 400 days deposit scheme, which was launched early this year, Nair said, adding, "the bank's retail deposit base has grown by a healthy 33 per cent during the first quarter."
A series of hikes in its key rates by the Reserve Bank has forced many banks to hike their lending rates in recent months, leading to a decline in credit offtake.
High inflation coupled with rising food prices are expected to influence the Reserve Bank's forthcoming quarterly review of credit policy scheduled for July 29 which could lead to a further monetary tightening.
