State owned bank Union Bank of India stated that bank will continue to focus on its retail loan growth. Bank is expecting a growth of 30-35% in its consumer loan portfolio in the current fiscal year.
Despite the Reserve Bank of India (RBI) allowing it to consider loan proposals up to Rs 200 crore from ‘AAA’-rated companies, the bank has decided to focus on retail loan growth. Retail loan of the bank comprises of home loans, car loans, education loan, and personal loan. It has been reported that the banks that are focusing on retail loan growth are doing better in managing their credit risk management than the other banks.
Analyst with deutsche bank stated that the retail segment has emerged as the strongest, despite growing concerns in the commercial vehicles segment. The bank will offer loans to large corporate, which will help the bank in to improve its overall credit growth. The bank also aims to raise Rs 575 crore by issuing equity shares on a preferential basis to the government and the Life Insurance Corporation (LIC) of India.