Union Bank plans retail focus

Union Bank of India plans to focus on the retail segment over the next two years.

The bank expects the segment to contribute 50 per cent of gross advances, as compared with 25 per cent now, executive director K Rathnakar Hegde said.

"We have not focused enough on the retail segment. We aim to ensure that retail lending accounts for half the gross advances in two years," he added.

Hegde said in two categories of retail lending "" home loans and vehicle loans "" there is an immense scope of tie-ups. "We are looking at tying up with builders.

We will give them concessions and they will, in turn, market our home loans. In the same way, the bank is looking at tie-ups with vehicle manufacturers," the Union Bank executive director, said.

Hegde said 121 branches of Union Bank have already been brought under the Core Banking Solutions platform. This number will be increased to 500 by the end of the next fiscal.

A sum of Rs 120 crore has already been sanctioned for this, he added. "Customers will then not just be customers of a branch, but of the bank. Once 500 banks are brought under the platform, the next stage of investment in technology upgradation will be taken up," he said.

Union Bank, which has a network of 2014 branches at present, has secured the licence for setting up representative offices in Dubai and Doha. Hegde said the bank is awaiting permission from the central banks of these countries.

"These two representative offices should begin operations by the first quarter of next fiscal. Union Bank will look to expand outside the country in the next fiscal," he said.

Hegde refused to comment on whether the bank was looking out for buyouts. "Acquisitions will soon achieve greater significance in the banking industry in India," he felt.

Hegde said the bank has so far 200 ATMs of its own and, under agreements with other banks, Union Bank customers can use a network of 1000 ATMs.

"We will set up an additional 300 ATMs of our own in the next fiscal," Hegde added.

On plans for branch expansions within the country, Hegde said, as banks are not permitted to shut down their loss making branches, Union Bank will convert these into satellite branches. "The bank will convert loss making branches into satellite branches even while looking to open new branches in areas where banking is profitable," he said.