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LENDING & CREDIT | Cesar Tordesillas, India
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United Bank of India lowers loan growth target

Sell bad loans to improve profitability.

The United Bank of India aims to bring down gross NPA to 3.25% by March next year from 3.8% on September.

But even if it has high hopes in accomplishing this, the bank still lowered its loan growth projection from 20 percent to 14-15 percent. 

Banks across the spectrum has witnessed a rise in bad loan ratios as different sectors are facing stress with sluggish economic growth.

Executive director Deepak Narang said the bank's priority for the next six months would be to reduce non performing assets ratio and cash recovery while advances growth may be lower than Reserve Bank of India's overall projection of 16%.

The bank had projected a 20% loan growth earlier in the year.

UBI plans to sell bad loans worth Rs 200-250 crore to asset reconstruction companies and it has already identified some 70 accounts. Narang said total cash recovery for the fiscal is targeted at Rs 450-500 crore which will include the proceeds from sale of bad loans.

UBI is expecting to restructure loans worth Rs 300-400 crore in the next two quarters, adding to its existing Rs 4,000 crore portfolio.

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