Uco Bank will focus on retail lending to boost margin and may cut growth in the next five years to use capital frugally.
It has projected a capital requirement of Rs 14,000 crore till 2018 under the imminent Basel III regime from January next year, assuming an average 18-20% growth, but it will face limited scope to raise fresh equities from the fund-starved government.
"We are short on capital and we need to conserve it," Uco Bank chairman and managing director Arun Kaul said in an interview with ET. "Our growth will depend on our ability to raise capital."
The CMD said the bank will go slow on overseas expansion to save resources. It has two branches each in Singapore and Hong Kong and faces problems of stressed assets there.
Uco wants to grow retail lending to improve yield on advances, which was 11.28% for 2011-12. Its net interest margin was 2.77%. State Bank of India improved the ratio to 3.85% with increased earnings from retail loan business.
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