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Mumbai: State-owned Union Bank of India has restructured retail loans of 6,557 crore or 5.2% of its retail loan book so far under the two tranches of Reserve Bank of India’s (RBI) covid-19 relief window, its chief executive Rajkiran Rai G said on Thursday.

While the first tranche of such one-time recasts has already ended, the second leg of the scheme is active till 30 September. The bank’s retail loan book stood at 1.25 trillion as on 30 June.

“Under resolution framework 1.0 we have restructured 11,965 crore. Of that 3,702 crore were from personal loans, 2,427 crore was from micro, small and medium enterprises (MSMEs) and 5,836 crore were from large corporates," Rai told reporters.

Rai added that under resolution 2.0, the bank’s total recasts were at 3,962 crore till 30 June. This time, personal loans were at 2,855 crore and 954 crore were from MSMEs, while the rest was from agriculture as large corporates are ineligible this time round.

“It is open for another three months. We expect that retail and MSME put together, we will do another 2,000 crore of restructuring in the second quarter," said Rai.

Like its peers, Union Bank of India also saw stress building up among small borrowers including MSMEs. Slippages from retail loans were at 1,078 crore and another 3,139 crore from small business.

“Of the first quarter slippages, close to 45% came from the MSME sector, most effected during the covid-19 wave. We are very confident with the kind of restructuring and Emergency Credit Line Guarantee Scheme (ECLGS) facilities that the stress will decline. This year we have given a projection of 13,000 crore in recoveries and upgradations. It was around 4,300 crore in Q1, and we feel that the full year target is achievable," said Rai.

He explained that the stress was mainly on account of covid-19 and equated monthly instalment (EMI) payments were affected. Most of the stress in retail, he said, was already covered in the June quarter and we do not see much in the September quarter.

The bank reported a more-than-trebling of its year-on-year (y-o-y) standalone net profit to 1,181 crore in the three months to June on the back of lower expenditure and higher other income.

“The bank’s performance has stabilized, and we have seen substantial improvement. After almost three to four quarters, we have seen a normal quarter on the business side. Even though we lost the first two months but then by June it stabilized," added Rai.

Shares of Union Bank of India on BSE closed at Rs37.95 on Thursday, up 6.9% from its previous close.

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