MIRA INFORM REPORT
|
Report Date : |
07.11.2006 |
IDENTIFICATION DETAILS
|
Name : |
UNION BANK OF INDIA |
|
|
|
|
Registered Office : |
Central Office, Union Bank
Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400 021,
Maharashtra, INDIA |
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Country : |
India |
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|
Financials (as on) : |
31.03.2006 |
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|
Date of Incorporation : |
11.11.1919 |
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|
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|
Com. Reg. No. |
11-000615 |
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CIN No.: [Company Identification No.] |
U99999MH1919PTC000615 |
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TAN No.: [Tax Deduction & Collection Account No.] |
MUMU00512B |
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|
Legal Form : |
Public sector commercial bank |
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|
Line of Business : |
All types of banking
business. |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa |
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
71-85 |
Aa |
Possesses adequate
working capital. No caution needed for credit transaction. It has above
average (strong) capability for payment of interest and principal sums |
Large |
|
Maximum Credit Limit : |
USD 3000000000 |
|
|
|
|
Status : |
Good |
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|
|
|
Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established and reputed bank owned by the Government of India. It is a profit-making bank. Lenders and creditors can feel confident
of Government of India’s exposure to them.
General financial position is satisfactory. Subject can be considered
good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
|
Registered Office : |
Central Office, Union Bank
Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400 021,
Maharashtra, INDIA |
|
Tel. No.: |
91-22-202 46 47 / 202 60 49 |
|
Fax No.: |
91-22-202 52 38 |
|
E-Mail : |
1. webmaster@unionbankofindia.com |
|
Website : |
011 84208 / 011 85156 / 011
83259 / 011 83291 / 011 83247 |
|
Area : |
|
|
|
|
|
Branches : |
All
over India |
DIRECTORS
|
Name : |
Shri K. Cherian Varghese |
|
Designation : |
Chairman & Managing
Director |
|
Age : |
59 years |
|
Experience : |
35 years |
|
Date of Appointment: |
9/12/2004 |
|
|
|
|
Name : |
Shri K. Rathnakar Hegde |
|
Designation : |
Executive Director |
|
Age : |
58 years |
|
|
|
|
Name : |
Shri B.S.Bhalla |
|
Designation : |
I.A.S. |
|
Age : |
40 years |
|
Experience : |
17 years |
|
Date of Appointment: |
24/01/2005 |
|
|
|
|
Name : |
Shri
A.N.Rao |
|
Designation : |
Director, Rbi Nominee |
|
Age : |
51 years |
|
|
|
|
Name : |
Shri A.K. Sharma |
|
Designation : |
Director |
|
Age : |
56 years |
|
|
|
|
Name : |
Shri M.L. Sabharwal |
|
Designation : |
Director |
|
|
|
|
Name : |
Shri Ashutosh Tandon |
|
Designation : |
Director |
|
Age : |
44 years |
|
|
|
|
Name : |
Dr. N.
Balasubramanian |
|
Designation : |
Director |
|
Age : |
70 years |
|
|
|
|
Name : |
Shri R. R. Nair |
|
Designation : |
Director |
|
Age : |
65 years |
|
|
|
|
Name : |
Prof. Nandlal L Sarda |
|
Designation : |
Director |
|
Age : |
56 years |
|
|
|
|
Name : |
Shri S. V. Dange |
|
Designation : |
Director |
|
Age : |
53 years |
MAJOR SHAREHOLDERS
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
|
Government of India |
280000000 |
55.43 |
|
Non Residents |
101019736 |
20.00 |
|
Banks/Financial
Institutions/Insurance Companies |
12802452 |
2.54 |
|
Mutual Funds/UTI |
20357145 |
4.03 |
|
Domestic Companies/Private
Body Corporate Bodies/Trusts |
13357686 |
2.64 |
|
Resident Individuals |
77580881 |
15.36 |
|
Total |
505117900 |
100.000 |
BUSINESS DETAILS
|
Line of Business : |
All types of banking
business. Union Bank of India focus on following areas for development |
GENERAL INFORMATION
|
No. of Employees : |
25645 |
|
|
|
|
Bankers : |
Reserve
Bank of India |
|
|
|
|
Facilities : |
-- |
|
|
|
|
Banking Relations : |
Good |
|
|
|
|
Auditors : |
Ř
S N Dhawan & Company Chartered Accountants Ř
V K Verma & Company Chartered Accountants Ř
Chandiok & Guliani Chartered Accountants Ř
Raj K Aggarwal & Associates Chartered Accountants Ř
Batliboi & Purohit Chartered Accountants Ř
Lodha & Company Chartered Accountants |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
150,00,00,000
|
Equity Shares |
Rs.10 each |
Rs. 15000. 000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
28,00,00,000
|
Equity Shares |
Rs.10
each |
Rs. 2800. 000 millions |
|
225117900 |
Equity Shares |
Rs.10
each |
Rs. 2251.179 millions |
|
|
Total |
|
Rs. 5051.179 Millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF
FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
1]
Share Capital |
5051.179 |
4601.179 |
4601.179 |
|
2]
Reserves & Surplus |
40530.394 |
31543.154 |
26270.213 |
|
3]
Deposits |
740942.977 |
618305.899 |
505589.314 |
|
4]
Borrowings |
39743.994 |
20209.583 |
9342.395 |
|
|
|
|
|
GRAND TOTAL |
826268.544 |
6746598.150 |
545803.101 |
|
|
|
|
|
|
APPLICATION
OF FUNDS |
|
|
|
|
|
|
|
|
|
Cash
and Balances with Reserve Bank of India |
43872.728 |
36471.776 |
24000.364 |
|
Balances
with Bank & Money at Call and Short Notice |
20032.413 |
29247.931 |
14478.918 |
|
Investments |
259176.496 |
227927.870 |
224420.350 |
|
Advances |
533799.552 |
401050.794 |
294259.142 |
|
Fixed
Assets |
8104.223 |
8237.866 |
7668.063 |
|
Other
Assets |
26274.980 |
21196.246 |
18339.929 |
|
Total Assets |
891260.392 |
724132.483 |
583166.766 |
|
Less:
Liabilities and Provisions |
64991.848 |
49472.668 |
37363.665 |
|
|
|
|
|
GRAND TOTAL
|
826268.544 |
6746598.150 |
545803.101 |
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
64888.054 |
57358.918 |
53477.701 |
|
|
|
|
|
|
Net Profit for the year |
7161.739 |
7964.999 |
7527.110 |
|
|
|
|
|
Total Expenditure
|
58136.222 |
50168.309 |
46357.193 |
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
|
30.06.2006 (1st Quarter) |
30.09.2006 (2nd Quarter) |
|
Sales Turnover |
|
16656.800 |
17723.700 |
|
Other Income |
|
1650.400 |
1917.600 |
|
Total Income |
|
18307.200 |
19641.300 |
|
Total Expenditure |
|
5309.300 |
5129.400 |
|
Operating Profit |
|
12997.900 |
14511.900 |
|
Interest |
|
10312.000 |
11448.500 |
|
Gross Profit |
|
2685.900 |
3063.400 |
|
Depreciation |
|
0.000 |
0.000 |
|
Tax |
|
1017.800 |
1121.800 |
|
Reported PAT |
|
1668.100 |
1941.600 |
200606 Quarter
1 - Provision &
Contingencies includes Provision for Non-performing Assets of Rs. 550.000
million Status of Investor Complaints for the quarter ended 30.06.2006
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 717 Complaints disposed off during the quarter 717
Complaints unresolved at the end of the quarter Nil 1. The above results for
the quarter ended 30.06.2006 have been subjected to a Limited Review by the
Statutory Auditors of the Bank, as per the listing agreements with the stock
exchanges. 2. The results have been taken on record by the Board of Directors
at its Meeting held on 20.07.2006. 3. The provision for non performing assets,
standard assets and investment depreciation has been made on the basis of
prudential norms issued by the Reserve Bank of India from time to time. 4. (a)
Gratuity, pension, leave encashment, income tax, fringe benefit tax and other
usual and necessary provisions have been made on estimated basis. (b) The
Institute of Chartered Accountants of India has issued a revised Accounting
Standard (AS-15) on employee benefits effective 01.04.2006. Pending Reserve
Bank of India guidelines, an additional provision of Rs. 150.000 million has
also been made in this respect on an estimated basis. 5. Floating provision has
been adjusted while computing Net NPA as on 31.03.2006 and 30.06.2006 where as
the same has been considered as part of capital adequacy as on 30.06.2005 in
terms of the guidelines of Reserve Bank of India in this respect.
200609 Quarter
2 - Provision &
Contingencies indicates Provision for Non-performing Assets. Status of Investor
Complaints for the quarter ended 30.09.2006 Complaints Pending at the beginning
of the quarter Nil Complaints Received during the quarter 1415 Complaints
disposed off during the quarter 1415 Complaints unresolved at the end of the
quarter Nil 1. The above results for the quarter and half year ended 30.09.2006
have been subjected to a 'Limited Review' by the Statutory Auditors of the
Bank, as per the Listing agreements with the stock exchanges. 2. The results
have been taken on record by the Board of Directors at its Meeting held on
18.10.2006. 3. The provision for non performing assets, standard assets and
investment depreciation has been made on the basis of prudential norms issued
by the Reserve Bank of India from time to time. 4. (a) Gratuity, pension, leave
encashment, income tax, fringe benefit tax and other usual and necessary
provisions have been made on estimated basis. (b) The Institute of Chartered
Accountants of India has issued a revised Accounting Standard (AS-15) on
employee benefits effective 01.04.2006 pending Reserve Bank of India guidelines,
an additional provision of Rs. 150 million and Rs. 300 million for the quarter
and half year ended 30.09.2006 respectively have also been made in this respect
on an estimated basis.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Credit Deposit Ratio |
68.78 |
61.42 |
57.12 |
|
Investment Deposit Ratio |
35.84 |
40.70 |
44.40 |
|
Cash Deposit Ratio |
5.91 |
5.38 |
4.88 |
|
Interest Expended/Interest Earned |
59.51 |
58.46 |
61.56 |
|
Other Income/Total Income |
9.63 |
13.37 |
16.03 |
|
Operating Expense/Total Income |
21.61 |
21.93 |
20.17 |
|
Interest Income/Total Funds |
7.30 |
7.66 |
8.33 |
|
Interest Expended /Total Funds |
4.34 |
4.48 |
5.13 |
|
Net Interest Income/Total Funds |
2.96 |
3.18 |
3.20 |
|
Non Interest Income/Total Funds |
0.78 |
1.18 |
1.59 |
|
Operating Expense/Total Income |
1.75 |
1.94 |
2.00 |
|
Profit Before Provisions/Total Funds |
1.99 |
2.42 |
2.79 |
|
Net Profit/Total Funds |
0.84 |
1.11 |
1.31 |
|
Return On Net Worth(%) |
18.67 |
25.05 |
30.47 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs.132.80/- |
|
Low |
Rs.130.20/- |
LOCAL AGENCY FURTHER INFORMATION
Union Bank of
India (UBI) was incorporated in 1919. From its modest beginning, the bank has
grown in size and stature to become a leading banking institution in India. The
number of branches of the Bank rose from 273 at the time of nationalisation in
1969 to reach 2,051 by March 2005.
UBI, wholly owned by the government of India (GOI), came out with its
first initial public offer (IPO) in Aug 2002 for 18,00,00,000 equity shares of
Rs 10 each at a premium of Rs 6 per share aggregating Rs 2880.000 Millions
through the fixed price route. It has also received 'in-principle' approval to
return the government capital to the extent of Rs 580.000 Millions.
The main object of the issue is to augment the long-term resources of the
bank and the capital base of the bank to meet its future capital adequacy
requirements. After the issue and return of capital, the shareholding of GOI
will come down to around 60.8%.
The bank offers a wide range of banking services. Among its recently
launched initiatives are Cash Management Service which is now operational and
Depository Services in Mumbai through a tie-up with Central Depository Services
Limited (CDSL). Also on the anvil are new initiatives such as insurance product
distribution and gold import. The bank has tied up with New India Assurance for
non-life products and with HDFC Standard Life for life insurance products.
The bank has a large network of geographically well diversified branches,
which enables it to raise low cost long-term deposits. As on March 2004 the
bank had 2020 branches, 47 satellite branches and 146 extension counters. 69
specialised branches are set up to cater to the needs of industrial finance,
non-resident Indians, small scale industry, specialised trading and personal
banking.
As far as its technology-related initiatives are concerned, 1304 out of a
total of 2020 branches of the bank have been computerised, covering nearly 83%
of its business. In the sphere of technology upgradation, the bank is
implementing a centralised core banking solution. The bank has tied up with
Wipro and Infosys, two IT majors, for the programme. These branches, which will
cover 60% of the bank's business, will provide anywhere and anytime banking,
Internet banking, mobile banking and telebanking. The Bank also proposes to
widen its ATM network. Its well-integrated treasury operations also provide
Negotiated Dealing System operations. There are SWIFT facilities at 42 branches
that have international business.
The bank has reached a major milestone in its technology upgradation by
inaugurating its 500th branch at Kurla,Mumbai in December 2004 under
the Core Banking System(CBS).
The bank has opened 23 new branches,14 new Extension counters and
upgraded 12 Extension counters into fullfledged branches during the financial
year 2004-05.The bank's total branch network went up to 2051 branches and 147
Extension counters at the end of fiscal year 2004-05.
Total business of the bank had registered a growth of 27.11% during the
fiscal 2004-05,as the total has risen to Rs.102934 crore from the previous
year's figure of Rs.80983 crore.
History
The
bank was incorporated as a limited company on 11th November, 1919
with its registered office at 7, Marzban Road, Mumbai. It was shifted to its
own premises at Apollo Street, Fort, Mumbai – 400 001 in 1921. Inaugurated by
Mahatma Gandhi and today it occupies enviable position amongst Nationalised
Bank.
The
Bank was nationalised in the year 1969.
It is now a Government of India Bank.
At
the time Nationalisation i.e. June 1969, it had 240 branches. Since then, the
branch network had grown substantially across the country with presence in 28
states, including union territories. As on 31st March 2002, Bank has
network of 2053 branches,- 843 Rural, 447 Semi-urban, 423 Urban and 340
Metropolitan branches.
Born
80 years ago, in the beginning of this century, Union Bank of India has
traversed an era, starting as a small bank and mushrooming into a giant. A
giant which is leading the banking sector into the 21st century. A
bank has played a dynamic role in the progress of India. A bank inspired by the
vision of Mahatma Gandhi that is fulfilling the needs of the nation and is at
the forefront of boosting global economy in India.
The
bank wholly owned by the government of India (GOI), came out with its first
initial public offer (IPO) in August, 2002 for 18,00,00,000 equity shares of
Rs. 10/- each at a premium of Rs. 6/- per share aggregating Rs. 2880 millions
through the fixed price route. It has also received “in-principle” approval to
return the government capital to the extent of Rs. 580 millions.
The
main object of the issue its to augment the long-term resources of the bank and
the capital base of the bank to meet its future capital adequacy requirements.
After the issue and return of capital, the shareholding of Government of India
will come down to around 60.8%.
Board of Director
SHRI K. CHERIAN VARGHESE
Chairman & Managing Director
A
professional banker with more than three decades of Banking experience. He is a
post graduate in Physics and winner of Gold Medal in B.Sc from the University
of Kerala. He is also an Associate of the Chartered Institute of Bankers,
London and was in the roll of honour of the top 50 who passed the examination
conducted world over in 1983 by the Chartered Institute of
Bankers, London. He was also made an Honorary Fellow
of the Indian Institute of Banking &
Finance
in recognition of the contributions made to Banking Industry.
He
started his career in Indian Bank and served in various capacities up to the
level of General
Manager.
He was a Technical Adviser to P.T. Bank Rama, Indonesia, from 1979-1983. Shri
Cherian
was also Chairman and CEO of the South Indian Bank Ltd., from 1991-1996. Before
joining
Corporation Bank, he served Central Bank Of India as Executive Director from
1998-
2000.
He took over as Chairman and Managing Director of Corporation Bank in
November
2000.
He
is a Member of Managing Committee of the Indian Banks' Association, a Member of
the
Governing
Council of the Indian Institute of Bankers and a member of the Governing Board
of
National
Institute of Bank Management. He is also a Director on the Board of
Export-Import
Bank
of India (EXIM Bank)
SHRI K. RATHNAKAR HEGDE
Executive Director
Started his career in Vijaya Bank in 1967 after
obtaining degrees in Humanities and Law. Has
worked in various capacities such as Branch Head,
Regional Head. Exposure to critical
departments in Corporate Office such as Credit
(Review and Recovery), Planning and Economic
Research, International Banking, Information
Technology, Inspection and General
Administration. As head of the Credit Card
Department he was instrumental in introducing
Credit Card and ATM in the Bank. He was also
instrumental for accelerated computerization in
the Bank.
SHRI B.S.Bhalla
I.A.S.
Respresents Government of India on the Board of
Directors of the Bank. He has a Bachelor of
Commerce degree with Honours from the University of
Delhi. He is also a holder of a Post Graduate Diploma in Management from Indian
Institute of Management, Bangalore and topped
the Master of Business Administration programme at
the University of Georgia, U.S.A. In the I.A.S. since 1990. He is presently
Director, Banking Division Ministry of Finance, Government
of India and has held various posts such as
Secretary (IT) / Secretary (Education) / Chief Electoral Officer Goa, Deputy
Commissioner (North) Government of Delhi, Collector and District Magistrate
Diu, etc. Has extensive formal training in Public Administration. Serves on
almost all the Committees of the Board
SHRI A.N.RAO
Director, RBI Nominee
Nominee of the Reserve Bank of India on the Board
of the Bank. Presently, Chief General
Manager, Department of Government and Bank Accounts
(DGBA), Reserve Bank of India.
Initially with Vijaya Bank after post graduate qualifications
obtained from the University of
Bangalore. Has wide exposure to various aspects of
Banking. Has been, involved in IT related
projects in the Reserve Bank of India including
design aspects. Serves on almost all the
Committees of the Board.
SHRI A.K. SHARMA
Director
Chartered Accountant, appointed by Government of
India under Clause (g). Chairs the Audit
Committee of the Board of Directors and is a member
of a number of other Committees including Management Committee of the Board of
Directors. Currently with the firm of B.M. Rallan & Co. Delhi. More than
two decades experience in the profession. Hon. Secy. Masonic Fraternity of New
Delhi; Past President, Fraternity Club Janpath.
SHRI M.L. SABHARWAL
Director
Based in Indore. Nominated by Government of India
under Clause (h) representing the interests of various sections of society. Had
under graduate and post graduate education at Ahilya University at Indore. More
than four decades experience in Banking. Active in social work.
SHRI ASHUTOSH TANDON
Director
Represents shareholder interests on the Board
having been elected to the Board at the EGM in
June 2003. Has interests in a small scale industry
and business and is a resident of Lucknow.
He has qualifications from the University of
Lucknow in Social Work and Economics. Is an
active member of various social welfare
organizations in Lucknow. Serves on various Committees of the Board of
Directors of the Bank.
DR. N. BALASUBRAMANIAN
Director
Elected to the Board by shareholders at the EGM in
June 2003. Has a PhD. in Finance from the University of Mumbai and is presently
a Professor at the Indian Institute of Management,
Bangalore. He is also a Fellow of the Institute of
Chartered Accountants. His fields of expertise
are Finance and Corporate Governance. Serves on
Committees of the Board.
SHRI R. R. NAIR
Director
Shareholder Director elected to the Board at the
EGM in June 2003. He has a Masters Degree
in Psychology and also has Post Masters Diploma in
Industrial and Personnel Management
from III, Kharagpur. Additionally, he has
qualifications from Universities in the UK and USA.
Has 30 years experience in HRD with Hindustan Lever
and Brooke Bond. On the Advisory
Board of Indian School of Business, Hyderabad and
is on the Academic Council of Tata
Management Training Centre, Pune. Member of
Committees of the Board.
PROF. NANDLAL L SARDA
Director
Represents the interests of shareholders, having
been elected at the EGM in June 2003. Is
presently a Professor at the Indian Institute of
Technology, Mumbai in the Department of
Computer Science and Engineering. He received his
Masters and his PhD. from IIT. Has 31
years experience. Serves on the Management
Committee of the Board of Directors and other
Committees of the Board.
SHRI S. V. DANGE
Director
Government nominated Director under Clause (e).
Bank employee since 1972. Currently,
serves as Vice President of the All India Union
Bank Employees' Association. Founder and
President of the Credit Co-operative Society
Gujarat. Involved with the Trade Union Movement
of Co-operative Banks in Gujarat since three
decades. Trustee of the Veer Savarkar Smriti
Trust, Mumbai. Has served on the Management
Committee of the Board of Directors.
Subject is a Government of
India Bank and is carrying on all types of banking business. Union Bank of
India focus on following areas for development:
v
Line House Activities:
Leasing and Hire purchase activity will be strengthened as in house function.
Consumer finance will be developing through personal banking services.
v
Subsidiary set-up:
Housing finance subsidiary is on the cards.
v
Rural touch: Upgrading
rural / semi-urban branches in terms of infrastructure and skills.
v
'ALM' Management:
treasury operations and management of investment portfolio have been redrawn
with the help of a consultant.
v
Add on services: Credit
card services will be rendered. ATM facility will be introduced.
v
Technology upgradation
areas: Remittances and fund transfer facilities, Assets and Liability
Management, MIS and corporate communications, VAST connectivity, Anywhere
banking.
Subject
is 83 year old Bank, having a continuous track record of profitability. The
bank offers a wide range of banking services. Among its recently launched
initiatives are Cash Management Service which is now operational and Depository
Services in Mumbai through a tie-up with Central Depository Services Limited
(CDSL). Also on the anvil are new initiatives such as insurance product
distribution and gold import. The bank has tied up with New India Assurance for
non-life products and with HDFC Standard Life for life insurance products.
The
Bank has a large network of geographically well diversified branches, which
enables it to raise low cost long-term deposits. As on March, 2002 the bank has
2023 branches, 47 satellite branches and 147 extension counters. 61 branches
are set up to cater to the need of industrial finance, non-resident Indians,
small scale industry, specialised trading and personal banking.
As
far as its technology – related initiatives are concerned , 1304 out of total
of 2023 branches of the bank have been computarised, covering nearly 83% of its
business. In the sphere of technology upgradation, the bank is implementing a
centralised core banking solutions. The bank has tied up with Wipro and
Infosys, two IT majors, for the programme. These branches, which will cover 60%
of the bank’s business, will provide anywhere and anytime banking, internet
banking, mobile banking and telebanking. The Bank also proposes to widen its
ATM network. Its well-intergrated treasury operations also provide Negotiated
Dealing System operations. There are SWIFT facilities at 42 branches that have
international business.
To
meet the particular requirements of certain section of economy / clientele bank
has opened specialised branches to catering to each segment. As on 31st
March, 2001 bank has 26 Small Scale Industrial, 9 Industrial Finance Branches,
8 Overseas, 6 Personal Banking, 4 NRI, 4 Specialised Savings branches and 5
Specialised Trading branches.
Besides
providing the traditional products, the branch network shall be thoroughly
exploited to improve by fee-based earnings. For this purpose, bank is making
foray into insurance business, DMAT facilities and cash management product.
'To
render high quality Banking to one and all' has been the bank's mission over
the last 80 years. It has provided not only services, but also explore new
adventures with banking to meet the requirements of its customers in the
changing time
FINANCIAL
HIGHLIGHTS:
The Bank crossed a major milestone of Rs.
1250000.000 Millions in total business by attaining a business level of
Rs.1287380.000 Millions as on 31.03.2006 up from Rs.1029340.000 Millions as on
31.03.2005, thereby registering a growth of 25.07%. The total deposits of the
Bank at Rs.740940.000 Millions, increased by 19.83% over March 2005 which is
higher than that witnessed in the banking industry. In absolute terms the
increase is by Rs.122630.000 Millions. The low cost deposits component at a
level Rs. 239750.000 Millions increased by Rs.37680.000 Millions and
constitutes 32.36% of the total deposit portfolio.
In
line with the accelerated credit demand in the economy, the Bank's total
advances expanded to a level of Rs.546440.000 Millions from Rs.411030.000
Millions as of March 2005 with an addition of Rs.135410.000 Millions and a
growth rate of 32.94%. The creditdeposit ratio moved to 73.75% as of March 2006
from 66.48% as of March 2005. The incremental credit-deposit ratio stood at
110.42%, which is in line with the trend observed in Scheduled Commercial
Banks(SCBs) credit growth.
INCOME
ANALYSIS:
The total income of the Bank improved substantially
to a level of Rs.64890.000 Millions for the year ended March 2006 from
Rs.57360.000 Millions as of March 2005, increasing in absolute terms by
Rs.7530.000 Millions with a growth rate of 13.13%. Primarily, this increase is
attributed to the growth in interest income on advances, which has leapt by
Rs.8910.000 Millions over the March 2005 level.
Total Interest income accrued during 2005-2006 was Rs.5864
crore as against Rs.49700.000 Millions in the previous year recording a growth
rate of 17.99%. Despite the continuous need to keep interest rates competitive,
the volume growth in advances resulted in interest income on advances
contributing the major share with an income of Rs.37600.000 Millions, thereby
registering a sharp growth of 31.06%.
The debt market scenario of rising bond yields
resulted in the Bank's trading income weighing down to Rs.950.000 Millions from
Rs.2600.000 Millions as of March 2005.
Further, extraneous factors in the form of
competitive market forces also impacted the fee based income portfolio of the
Bank. However, diversification into various new initiative products and sale of
third party products has resulted in income from commission, exchange and
brokerage growing to Rs.2180.000 Millions from Rs.1770.000 Millions as of March
2005, thus offsetting part of decline in treasury income.
The percentage of non-interest income, excluding
profit on sale of investments to total income is at 8.18% in 2005-2006.
Despite highly competitive environment the net
income from the operations (net interest income + non-interest income including
profit on sale of investments) stood at Rs.30000.000 Millions, up from
Rs.28310.000 Millions in 2004-2005, recording a growth of 5.97%.
During 2005-06, total expenses at Rs. 48920.000
Millions increased by Rs.7290.000 Millions with a growth percentage of 17.51%
over the previous year level of Rs.41630.000 Millions mainly on account of the
interest cost of raising substantial need based resources to fund the spurt in
credit off-take. Interest expenses on deposits and borrowings stood at
Rs.34890.000 Millions which show an increase of Rs.5840.000 Millions over the
previous year level of Rs.29050.000 Millions registering an increase of 20.10%.
Total operating expenses at Rs.14030.000 Millions
as of March 2006 has shown an increase of Rs.1450.000 Millions with percentage
Increase of 11.53% when compared to the level of
Rs.12580.000 Millions in 2004-2005.
The increase in operating expenses resulted from
the escalation in establishment cost which rose to a level of Rs.8670.000
Millions in 2005-2006 as compared to Rs.8060.000 Millions in 2004-2005,
registering an increase of 7.57%. This was mainly due to higher contribution to
Pension Fund, Gratuity Fund and provision for leave encashment liability.
Other operating expenses (excluding staff cost)
have also registered an increase of Rs.840.000 Millions, mainly due to higher
depreciation and payment of insurance premium.
The ratio of operating expenses to net operating
income increased from 44.44 % in 2004-2005 to 46.77% in 2005-2006 for reasons
enumerated above.
SPREAD
ANALYSIS:
Bank's net interest income improved to Rs.23750.000
Millions in 2005-06 from Rs.20650.000 Millions in 2004-2005, thereby
registering a growth of 15.01%. The increase is attributed to the substantial
increase in interest income arising from volume growth in advances.
Despite the healthy growth in net interest income,
the decline in Net Interest Margin to 3.03% as of March 2006, could not be
arrested due to the higher interest outgo on resources raised to fund the
substantial increase in credit exposure resulting from the improved economic
scenario in the country. The fall in yield on investment also contributed to
decline in the Net Interest Margin.
It was only through systematic resource planning,
that the Bank was able to reduce the cost of deposits from 4.97% as of March
2005 to 4.75% as of March 2006. However, the yield on advances and yield on
investment slipped to 8.18% and 7.84% respectively from 8.33% and 8.20% as of
March 2005.
Operating
Profit:
Bank achieved an operating profit level of
Rs.15970.000 Millions for the year ended March 2006 growing at 1.53%. The
operating profit was impacted on account of higher interest expenditure on
resources and fall in treasury income. tax declined to Rs.6750.000 Millions as
against Rs.7190.000 Millions in 2004-05. This can be attributed to the higher
provision for tax amounting to Rs.2190.000 Millions. The net interest margin is
3.03% as of March 2006.
Provisions
& Contingencies:
The allocation for provisions and contingencies
stands at Rs.7030.000 Millions which is lower by Rs.2580.000 Millions from the
level of Rs.9610.000 Millions allocated in March 2005. The need for a lower
allocation is due to certain prudent measures undertaken by the Bank and which
have been spelt out hereunder.
Provision for depreciation on investment including
amortisation of premium on Held to Maturity category and one time shifting of
securities from AFS to HTM category is to the tune of Rs.4330.000 Millions as
compared to a provision of Rs.5850.000 Millions in 2004-2005. The same would
have been substantially higher but for the timely shifting of securities to HTM
category in 2004-2005 and 2005-2006.
During
the year 2004-2005, the floating provisions of Rs.3930.000 Millions was not
netted for calculation of net NPAs. However, during the year under review the
Rs.2780.000 Millions from floating provision has been netted to arrive at the
position of net NPAs, thereby reducing the level of provisioning required under
this category.
Rs.1560.000 Millions has been provided for Non
Performing Assets as against Rs.2160.000 Millions in March 2005. The need for provisioning towards wage
arrears no longer existed in March 2006 since the same amounting to Rs.1200.000
Millions was provided for during 2004-2005.
However, the provision for standard assets had to
be raised to Rs.1010.000 Millions in March 2006 as against Rs.260.000 Millions
in March 2005 in compliance with RBI regulations.
The profit before tax as of March 2006 is at Rs.
8940.000 Millions as against Rs.6120.000 Millions in March 2005. However,
profit after tax declined to Rs.6750.000 Millions as against Rs.7190.000
Millions in 2004-2005. This can be attributed to the higher provision for tax
amounting to Rs.2190.000 Millions. The net interest margin is 3.03% as of March
2006.
Net
Profit & Dividend:
Taking into account the total provisions of
Rs.7030.000 Millions, which also includes shifting loss of Rs.2350.000 Millions
and higher provision for standard assets the Bank posted a net profit of
Rs.6750.000 Millions in 2005-2006.
During the year 2004-2005, the Bank was not
required to make any provision for taxation in view of the fact that a tax
refund of Rs.1070.000 Millions was due to the Bank. However during the year
under review a provision of Rs.2190.000 Millions has been made on account of
income tax to be paid thus impacting the level of net profit in 2005-2006.
Out of the net profit of Rs.6750.000 Millions, an
amount of Rs.2030.000 Millions was transferred to Statutory Reserve, as against
Rs.2160.000 Millions in 2004-2005.
The Board of Directors are pleased to recommend a
dividend of 35% for 2005-2006. Though the allotment of equity shares under the
Follow on Public Offer was made only in the first week of March 2006, these
shareholders will also be entitled to the dividend for the full year at the
rate of 35%.
The dividend for financial year 2005-06 shall be
subject to tax on dividend to be paid by the Bank but will be tax free in the
hands of shareholders. The total outflow on account of dividend for 2005-06 is
Rs.2015.800 Millions including dividend tax The payout ratio works out to
29.86%.
NET WORTH & CRAR:
During the year the Bank raised additional share
capital of Rs.450.000 Millions by way of a Follow on public offer.
The net worth of the Bank improved to Rs.40800.000
Millions as on 31.03.2006 from Rs.31210.000 Millions as on 31.03.2005 reflecting
a growth of 30.72% due to plough back of net profit of Rs.4450.000 Millions
along with proceeds of FPO of Rs.4950.000 Millions.
The Capital Risk Adjusted Assets Ratio (CRAR) is
11.41% as of March 2006, compared to 12.09% as of March 2005, against the
benchmark of 9%. Despite increase in capital funds the CRAR has declined due to
increase in the asset base.
The CRAR of Tier I capital has improved from 6.07%
as of March 2005 to 7.32% as of March 2006 mainly due to increase in the
capital from the FPO and accounting of Investment Fluctuation Reserve in Tier
I.
Tier II CRAR has slipped to 4.09% from 6.02%
because of shifting of IFR to Tier I and non-reckoning of floating provision of
Rs.2780.000 Millions.
Earning per share stood at Rs. 14.58 as of March
2006 as compared to Rs.15.64 as of March 2005.The book-value per share went up
to Rs.80.77 as of March 2006 from Rs.67.18 as of March 2005.
BRANCH
NETWORK:
During the year 2005-2006, Bank opened 31 new
branches and 6 Extension Counters. To facilitate all the facilities of a
branch, 5 extension counters were upgraded to full fledged branches. The total
branch-network went up to 2082 and is supported by 145 Extension Counters. The
comparative position of branches including specialized branches for 2004-2005
and 2005-2006 is indicated hereunder: cardholders to operate their account Any
Time Any Where for select transactions.
The reduction in the numbers in these categories is
due to their upgradation to general category branches in order to exploit the
untapped potential in the command areas of these units and garner additional
business. This has been possible by reaching out to a wider customer base and
extending the entire bouquet of products and services to these customers
The ATM network of the Bank has gone up to 472 of
which 143 ATMs are at Off-site locations. All the ATMs are interconnected
thereby facilitating easy accessibility to the cardholders to operate their
account Any Time Any Where for select transactions.
NEW
BUSINESS INITIATIVES:
The Bank has already identified alternate revenue
streams to boost fee-based income with the objective of enhancing its coverage
of operating expenses. The major initiatives in this direction are spelt out
hereunder:
The Bank is gradually moving towards becoming the
leading supermarket for all financial and third party products under one roof
by offering one stop shop for customers for substantially shoring up its fee
based earnings.
The Bank is holding the Corporate Agency of HDFC
Standard Life Insurance Company for the distribution of life insurance
products. The earning from life insurance policies issued has increased from
Rs. 62.600 Millions to Rs. 105.000 Millions in March 2006.
Through the tie-up with HDFC Standard Life
Insurance Company., the Bank is offering group insurance product viz.,
"Union Suraksha" providing insurance cover to depositors at their
option. This scheme is available at all their metropolitan and urban branches.
The Bank has also tied up Health product viz.
Mediclaim Policies with "The New India Assurance Company." for
distribution of general insurance products.
For providing insurance cover to Home Loan
borrowers, the Bank has tied up with SBI Life Insurance Co. The borrower is
provided with insurance cover up to the outstanding Home Loan amount. This is a
Group Insurance product with single premium for the entire duration of the
loan.
The Bank has acquired Clearing Bank status for
National Stock Exchange and Bombay Stock Exchange.
The Bank also acts as Clearing Bank for Multi Commodities
Exchange (MCX) and is empanelled as Clearing Bank of National Commodities and
Derivatives Exchange
(NCDEX).
The Bank is distributing Mutual Fund products of
almost all leading AMCs through AMFI trained Marketing Officers. For this
purpose, the Bank has also signed MOUs with HDFC MF, DSP Merill Lynch MF, UTI,
Principal MF, Reliance MF and Chola MF.
The Bank is a licensed DP of Central Depository
Services Ltd (CDSL) and Demat services are provided through all 718 CBS
branches. Bank has made substantial inroads in this segment by improving the
number of Demat accounts in March 2006 to 98000 from 30000 in March 2005.
The Bank has also introduced On-line trading
facility to their customers having Demat accounts with us.
"Union Bill Pay" scheme providing
electronic utility payment services is presently available at eight major
centers. For Internet users, the Bank has provided Payment Gateway to all major
Billers.
The Bank has obtained license from Government of
Maharashtra & Government of Gujarat for stamp vending and have installed
franking machines in some of the branches to offer this value added service.
The revenue from this activity has improved from Rs.03.100 Millions to
Rs.11.600 Millions in March 2006.
The Bank has been playing a substantial role in
assisting both the Government and the citizens by acting as an intermediary in
the field of tax mobilization and services unsder
Government schemes.
To extend the facility of collecting direct taxes
under OLTAS, the Bank has been successful in obtaining approvals for 609
branches in March 2006 as against 432 branches in March 2005 to accept direct
taxes.
Similarly, the number of branches accepting
indirect taxes (Central Excise and Service Tax) has increased from 212 in March
2005 to 267 in March 2006.
The number of branches accepting Senior Citizens
and PPF deposits has taken a quantum jump from 53 branches in 2004-05 to 536
branches in 2005-06.
Despite the reduction in the rate for agency
commission for carrying out Government Business, the Bank has been able to
retain its share of revenue at Rs.14 crore in March 2006, in view of aggressive
marketing of the services to the customers.
INFORMATION
TECHNOLOGY AND CUSTOMERSERVICE:
In order to position itself as a global player
backed with the best available technology, the Bank is building its future
product and services by leveraging technology. This will ensure that the Bank's
electronic delivery channels reach the customers at his doorstep, leading to
Customer Delight.
The number of ATMs of the Bank has gone up to 472
of which 143 ATMs are at offsite locations. AII the ATMs are networked thereby
facilitating the cardholders to operate their account Any time Any Where for
select transactions.
Banking:
Union E-Banking caters to both Retail and Corporate
customers. Individuals / Joint Individuals / Proprietary concerns and HUF etc.
are covered under the Retail module while Partnership Firms and Limited
Companies are covered under the Corporate module. A number of new features like
online Railway Ticket Booking, payment of taxes on line, on line trading in
shares and utility bill payment, ticket booking on "Indian" and
facility for buying season tickets for travel on local trains have been
introduced.
Telebanklng:
Telebanking ( Union Dial) is presently available at
19 Telebanking centres across different cities viz. Mumbai, Pune, Delhi,
Baroda, Bangalore, Bhopal, Chennai, Bhubaneshwar, Ernakulam, Hyderabad,
Kolkata, Coimbatore, Jalandhar, Nagpur, Lucknow.Ranchi, Dehradun, Chandigarh
and Jaipur.
The Union Dial solution supports SB, current, C/C,
O/D, Term deposits and loan accounts. The service is available both in Hindi
& English.Customers can obtain current balance, Transaction details,
Account statement (by fax / by email ), cheque information, stop payment of
cheque etc.
Product information and deposit rates are available
to noncustomers. Both the services are available to the customers of CBS
branches.
CHANGES
IN THE BOARD DURING THE YEAR
During
the year under review, the following changes took place in the Board of
Directors:
Shri
A.K. Sharma, Non-Official Director(CA) ceased to be Director as his term
expired on 11.06.2005.
MACROECONOMIC
SCENARIO:
The Indian economy is in the center of an ever
increasing growth curve with sustained growth in the industry and the services
sector, dovetailed by other positive and encouraging indicators like burgeoning
exchange reserves of close to US$150 billion, a booming capital market with the
popular Sensex index crossing the 10,000 mark, record FDI inflow of US$ 5.8
billion and a strong growth of 24.7% in exports.
The Central Statistical Organisation (CSO) advance
estimates place the GDP growth at 8.1% in 2005-2006. The sector wise growth
estimates places agriculture at 2.3%, industrial sector at 8% and services
sector at 10.1%.
The services sector, which recorded double-digit
growth for the second successive year continued to be the major driver of
economic activity. Healthy growth in bank deposits, sustained acceleration in
non food credit and increased exports of information technology enabled
services buoyed up the sub sector financing, insurance, real estate and
business services.
Growth in industry was propelled by the
manufacturing sector, which has been consistently posting a robust and broad based
performance. During the period April 2005 - February 2006, the sector has
posted a growth of 9%. In consonance with the pick-up in investment activity in
the economy, growth of the capital goods sector also accelerated and registered
a growth of 16.5% during April 2005 – February 2006. The consumer goods sector
also maintained the high growth momentum.
Growth of real GDP originating from 'agriculture
and allied activities' is expected to register a modest pick up during the year
2006-2007.
Gross Domestic Saving as a percentage of GDP at
current market prices, increased from 28.9% in 2003-2004 to 29.1% in 2004-2005
led by higher public sector saving resulting from lower dissaving of public
authorities. Although the overall savings rate increased by 0.2% of GDP, the
overall investment rate increased by 2.9% of GDP to 30.1% in 2004-2005
reflecting a recourse to higher foreign savings i.e net capital inflows of 1.0%
of GDP.
The inflationary situation in the economy remained
benign despite continued dominance of supply side factors. Inflation based on
movement in the Wholesale Price Index (WPI) eased as low as 4.08% as of March
2006.Inflation in the fuel group, was at 8.6% as of March 2006, but this rise
was offset by the fall in prices of primary articles and manufactured products.
The Liquidity Scenario-2005-2006: Monetary and
liquidity conditions remained largely comfortable during the first half of
2005-2006.However, by the second half of the fiscal, persistently high credit
offtake and redemption of India Millennium Deposits, did bring some pressures
on liquidity. RBI had to inject liquidity through unwinding of the Market
Stablisation Scheme (MSS) and repo operations under the liquidity adjustment
facility. As a result, the banking system was able to meet sustained pick -up
in credit demand.
External Sector: During 2005-2006, India's exports
continued to maintain the momentum of high growth in an environment of growing
competitiveness of the domestic manufacturing sector and favourable global
conditions. Export growth was broad based increasing by 24.7%. Imports
maintained a tempo of high growth at 31.5 % led by both oil and non-oil
imports.
During 2005-2006, the current account deficit
widened substantially which was however, offset by surplus in the capital
account.
India's foreign exchange reserves increased by US $
bn to reach a level of US $ 151.6 bn by end March 2006 taking the country to
the sixth largest stock of reserves in the world.
The foreign exchange market remained orderly in
2005-2006 exhibiting two way movements. The rupee depreciated by 1.9 % against
the US dollar but appreciated by 4.4 % against the EURO, by 5.5 % against the
pound sterling and 7.5 % against Japanese Yen.
On the back of sustained growth in the economy and
positive investment climate, capital flows to India remained strong led by
foreign investment flows with FDI inflow being to the tune of US $ 5.8 bn
during April - January 2006 which is 31 % higher than previous year. FDI was
channeled mainly into manufacturing business and computer services.
Cumulative Fll inflow during April- February
2006 amounted to US $ 8.2 bn.
The capital market exhibited buoyancy with the
benchmark indices reaching record highs driven by strong support from foreign
institutional investors (Flls) and domestic mutual funds. Resources raised by
the Indian corporates through initial public offerings, private placement and
EURO issues increased significantly.
Annual
Policy Statement of RBI:
The Annual Policy Statement of RBI for 2005-2006
focused on significant reforms in the debt market, money market, foreign
exchange market, credit delivery and customer service. The policy dealt
extensively with credit delivery to agriculture and small business. The overall
stance of the policy continues with the provision of appropriate liquidity to
meet credit growth and support investment and export demand in the economy
while placing equal emphasis on price stability. In all the quarterly reviews,
RBI consistently and persistently brought out the implications of the
accelerating credit demand on asset quality. Accordingly, the focus was on risk
management practices, with risk weightage on real estate and housing sector
witnessing an increase. In response to the changing scenario RBI hiked the
benchmark reverse repo and repo rates by 25 basis points
Banking Industry
Trends
The banking system experienced pressure on
liquidity towards the close of the year. Banks found it difficult to mobilize
savings since the relative returns provided by alternate avenues of investment
like real estate, stock markets, mutual funds and commodity markets was higher
than that from deposits. The pressure on liquidity in the last quarter also
resulted in firming up of interest rate in both deposits and advances.
Growth in aggregate deposits increased to 16.9%
yearon- year from 15.1% of previous year, attaining a level of Rs.20876700.000
Millions. The growth rate in demand deposits exceeded that of the time deposits
as the sustained pick up in non-food credit and a buoyant capital market led
funds getting temporarily parked in demand deposits.
For the second year in succession, the credit
growth in the industry moved at a much faster rate than the growth in deposits.
Credit growth remained strong on account of acceleration in credit to
commercial sector. Credit growth increased to 29.9% from 31.7% year ago and
reached to a level of Rs.3442640.000 Millions. Food credit increased by
Rs.17710.000 Millions as on 31.03.2006 reflecting a lower order of procurement
of foodgrains. On the other hand, non-food credit growth was broad based
reflecting strengthening of economic activity. On a year on year basis,
non-food credit registered a growth of 30.8% as against 28.8% year ago. The
incremental credit deposit ratio of SCBs stood above 100%.
The growth in credit saw banks liquidating their
excess investment to meet loan requirements. Accordingly, investment witnessed
a fall by 1.7% over the previous year.
GLOBAL
DEVELOPMENTS:
Global growth moderated in the 4th
quarter of 2005 and as per IMF the growth for the full year is estimated
to be 4.8 % with broad based expansion in economic activity. Though price
stability has been maintained in major industrial economies in the face of the
oil shock, however risks due to lagged second order effects of oil price
increases continues to hover around the economy. Additionally, risks due to
disorderly and rapid adjustment of current account imbalances and those
emanating from the housing market particularly at the turn of the cycle exist.
BUSINESS
PERFORMANCE OF THE BANK: TOTAL BUSINESS MIX
During the financial year 2005-2006, the Bank
crossed a milestone of Rs.1250000.000 Millions in total business and reached a
level of Rs.1287380.000 Millions as on 31.03.2006 as compared to a business mix
of Rs.1029340.000 Millions as on 31.03.2005, thereby registering a growth of
25.07%.
RESOURCE
MANAGEMENT:
Total deposits of the Bank scaled to a new high of
Rs.740940.000 Millions as on 31.03.2006 from a level of Rs.618310.000 Millions
as on 31.03.2005 with an incremental accretion of Rs.122630.000 Millions and
growth of 19.83%.
TOTAL
DEPOSITS
The low cost deposits portfolio at Rs.239750.000
Millions increased by 18.65% over March 2005 level of Rs.202070.000 Millions
and accounted for 32.36% of the total deposits. In the low cost deposits
portfolio, Demand deposits of the Bank at Rs.59790.000 Millions witnessed a
growth of 19.32% over March 2005 level of Rs.50100.000 Millions. Savings bank
deposit portfolio attained a level of Rs.17997crore as on 31st
Mar'06 as against Rs.151970.000 Millions as on 31.03.2005, recording a
growth of 18.42%. This is higher than the percentage growth of 16.15% achieved
during the previous year. Non-Resident Deposits have registered a growth of
5.25% and reached the level of Rs. 41300.000 Millions in line with the trend in
the Industry.
Credit
Management:
Credit portfolio of the Bank at Rs.546440.000
Millions as on 31.03.2006, outshined the previous year's performance with an
incremental growth of Rs.135410.000 Millions, which in percentage terms
amounted to 32.94%. The growth engines were infrastructure financing, retail
and agriculture.
The buoyancy in the economy led to a robust growth
in Non-food credit of the banking system. Bank's non-food credit increased by
Rs.135010.000 Millions to reach a level of Rs.529230.000 Millions as compared
to Rs.394220.000 Millions in March 2005. The growth registered was 34.25% as
compared to 35.10% in the previous year.
This highly competitive segment witnessed an
intense price war which contributed to a marginal decline in the yield on
advances from 8.33% to 8.18%.
55%
have settled with self-employment. 8.9.4 The Bank has established a Rural
Development
Foundation
at Alibaug, Maharashtra, with the following objectives:
promoting
scientific, educational and extension activities in the field of Agriculture
and rural development;
create
awareness amongst the rural community about the various rural development
programmes;
foster
basic amenities like health, education, adult literacy, etc.;
promoting
Self Help Groups, disseminate information on various rural development
INTERNATIONAL
BANKING:
The Bank had a robust growth in International
Banking Business. The foreign exchange turnover, which was Rs. 361020.000
Millions in 2004-2005, has reached the level of Rs. 408940.000 Millions during
the year, showing a growth of 13.27%.
The Bank is having a correspondent relationship
with 345 leading international banks at all major international centers. The
Bank has entered into Rupee Drawing Arrangements (RDA) with 23 International
Banks and 13 Exchange Houses in the Middle East. The Bank has also
introduced a Internet-based 'On-line Remittance
Product' for NRIs in U.K. and U.S.A as well as for Exchange Houses in Middle
East.
The Bank is one of the leading players in the
Bullion market and offers various financial products related to Bullion at 10
centers in the country.
OVERSEAS
OPERATIONS:
The Bank has received approval from RBI for opening
Representative Office in China and Dubai and applications have been submitted
to the respective Central Authorities seeking their approval for opening of the
Office. Bank has also received approval from RBI for opening branches at Doha
(Qatar) and Hong Kong. They have already filed necessary application with the
Qatar Central Bank requesting for approval for opening a branch in Doha. In the
case of Hong
Kong, application shall be submitted to their
Regulatory Authority shortly. Bank has also applied to RBI for permission to
open branches at Singapore and San Jose.
TREASURY
OPERATIONS:
The Bank's Treasury - integrating the management of
domestic and foreign exchange funds and investment operations centrally,
focuses on profit maximization, through diligent control of liquidity and
proper compliance of regulatory requirements. As the apex centre monitoring the
resources inflows and funds deployment/outflows, the Treasury also integrates
the proper Asset Liability Management of the Bank. The Treasury is ISO
9001:2000 certified.
Besides managing funds at different centers of operation,
the Treasury also undertakes proprietary positions in different segments like
debt, equity, foreign exchange etc. As the gateway of transactions for the Real
Time Gross Settlement (RTGS) System and main hub for Society for World Wide
Inter-bank Financial Telecommunications (SWIFT) the Treasury has a prominent
role in messaging and remittance arrangements as well. "Union Bullet"
utilizing the RTGS
Union Bank of India
introduced profile of branches into the following groups:
v
Specialised Branches -
400
v
Key Branches -
200
v
General Banking
Branches - 700
v
Rural / Semi - Urban
Branches - 1000
Union Bank of India has
agency agreement with approximately 380 international banks in 85 countries.
All branches that is
(approximately 55) directly deals with these banks like:-
v
Advising / Issuance of
letter of credit
v
Confirmation of letters
of Credit
v
Issuance of guarantees
favouring Indian beneficiaries
v
Remittance both inward
and outward by way of DD & TT
v
Negotiating /
Discounting /collecting trade documents.
v
Providing Credit /
Status reports on Indian Corporate etc.
Treasury Bank undertakes the
following services :-
v
Working Capital term
loans in foreign currency
v
Corporate advisory
services in forex matters
v
Booking a forward
currencies /swaps, currency options
v
Maintenance of Exchange
Earners Foreign Currency accounts (EEFC)
PRESS RELEASE
INAUGURATION
UNION BANK OF INDIA RURAL DEVELOPMENT
AND SELF EMPLOYMENT TRAINING
INSTITUTE (UBI RUDSETI)
Union Bank of India was founded on
November 11, 1919 with a mission to render high quality banking services to one
and all and on July 21, 1921, the Father of the Nation, Mahatma Gandhi,
inaugurated its new registered office at Apollo Street, Bombay. Now the Bank occupies a prime position
among the banks in India and ranks one among the top 5 nationalized banks. The bank has a well-knit branch network
of 2024 branches spread all over the
length and breadth of the Country and catering to each and every sector &
field such as Trade Finance, Industrial
Finance, Agricultural Finance, NRI Services, Personal Banking, Housing Finance,
Specialization to specific groups, professionals, pensioners and the like.
Their commitment to serve the rural
sector remains a firm resolve.
Unemployment and underemployment have been the major problems in both
rural and urban areas. The youth in
particular are required to be assisted to take up gainful self-employment
ventures by making necessary awareness by motivation and by imparting the
required skills.
Keeping in view these objectives,
their Bank has taken initiative to sponsor Rural Development and Self
Employment Training Institute in their Lead Districts viz. Ernakulam and
Varanasi. To begin with, in this series the first such Institute has been opened at Perumbavoor,
Dist. Ernakulam on the Gandhi Jayanthi day i.e. Oct. 2, 2004, by their Executive Director, Shri K.
Ratnakar Hegde.
The
objectives of the Institute are :-
v
To train youth in rural
and semi urban areas for taking up self-employment ventures.
v
To train youth to
develop the attitude for working in rural and semi urban areas.
v
To assist the trained
youth, helping them to get credit facility from Banks and Financial
Institutions.
v
To design and conduct
various training vocational and human resource, development training
programmes.
v
To provide expert guidance and assistance to
the institutions, organizations/individuals dealing in Rural Development, when
need arises.
v
To do and carry on all
such activities as are necessary and incidental to the effective implementation
and due fulfillment of the objectives of the society as the governing council
may decide from time to time.
The Bank has also started process of establishing a
Rural Development Foundation at Alibag (Maharashtra) which besides imparting
training to youth and farmers will also develop demonstration farm for
Agriculture and Allied activities in 5 acres leased/owned land of its own.
Union
Bank launches quick outstation cheque
collection
product for Individuals & SME’s
Mumbai, 06.11.2006, Union
Bank of India in its endeavour to provide convenient and improved services to
its patrons launched a unique outstation collection product that assures credit
of outstation cheques on sixth day. The product is uniquely designed for the
benefit of Individuals and Small & Medium Enterprises (SME’s).
The product named Quick Outstation Cheque
Collection (QCC) is available at more than 850 CBS Branches of the Bank. The
bank plans to increase CBS branches to1200 by 31.03.2007 which will further
increase the coverage of the product. Making the most of the excellent CBS
network, the bank has reduced the outstation cheque collection time to 6 days
from the existing 10-14 days. The reduction in outstation cheque collection
time will result in immense benefits to the customers in the form of better
receivables management and will reduce working capital requirements.
The bank has a business turnover of over Rs
1400000.000 Millions with 2100 branches spread across the country and proposes
to open another 100 branches by March 2007. Union Bank is the one amongst the
first PSU banks to make concentrated efforts to improve on customer service
operations by introducing Information Technology in a large scale.
Union Bank is the first PSU bank with this unique
product for the benefit of Individuals and Small & Medium Enterprises. Till
now only large Corporates are the beneficiaries of the faster cheque collection
products in banking industry.
UNION
BANK RAISED Rs.5000.000 Millions UPPER TIER II CAPITAL
Mumbai, Dated 13.10.2006:
Union
Bank of India has today raised additional capital to the extent of Rs. 7500.000
Millions by Issue of Upper Tier II Bonds. The Issue was for Rs. 5000.000
Millions with a Green Shoe option of Rs. 5000.000 Millions and arranged and
fully underwritten by CitiBank N. A., ICICI Bank, Standard Chartered Bank and
UTI Bank. The Issue was rated AA+ by Crisil and AA by Fitch. The Issue was over
subscribed by Rs. 2500.000 Millions hence the Bank exercised the Green Shoe
option to retain the excess amount.
The
issue opened on 10.10.2006 and closed on 12.10.2006. Allotment of the Bonds
will be completed on 16.10.2006. The Bonds are of 15 years tenure, having a
call option by the Bank to redeem it after the 10th years. These Bonds carry a coupon rate of 8.95% payable
annually, with a step-up option of 50 bps at the end of 10th year, if call option is not
exercised.
CMT REPORT [Corruption, Money laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No exist designating subject or any of its beneficial
owners, controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the
subject of any formal or informal allegations, prosecutions or other official
proceeding for making any prohibited payments or other improper payments to
government officials for engaging in prohibited transactions or with designated
parties.
3] Asset
Declaration :
No records exist to suggest that the property or
assets of the subject are derived from criminal conduct or a prohibited
transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.
8] Affiliation
with Government :
No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.
9] Compensation
Package :
Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.
10] Press Report :
No press reports / filings
exists on the subject.
CORPORATE
GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN
EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs. 44.90 |
|
UK
Pound |
1 |
Rs. 85.91 |
|
Euro |
1 |
Rs. 57.78 |
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely
sound financial base with the strongest capability for timely payment of
interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate
working capital. No caution needed for credit transaction. It has above
average (strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational
base are regarded healthy. General unfavourable factors will not cause fatal
effect. Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is
considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable &
favourable factors carry similar weight in credit consideration. Capability
to overcome financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are
apparent. Repayment of interest and principal sums in default or expected to
be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk
exists. Caution needed to be exercised |
Credit not recommended |