Public sector lender, Union Bank of India, on Tuesday said it expects double-digit credit growth aided by capitalisation in Q4FY19.

The state-run lender reported a net profit of Rs 153.21 crore for the third quarter ended December 2018. The bank had posted a loss of Rs 1,249.85 crore in the corresponding period of the previous financial year.

In an interview to CNBC-TV18, Rajkiran Rai G, managing director and chief executive officer, said, "The domestic loan growth was in-line with the bank's projections at around eight percent year-on-year, but the overall book degrew because of shrinkage of business in the overseas book."

However, Q4 is expected to be much more robust in terms of credit growth and the overall book is also expected to grow substantially as the foreign branches have started growing, Rai said.

Further, Pai said, "Out of the Rs 2,900 crore slippages, Rs 700 crore came from existing non-performing asset (NPA) accounts mainly from retail, agriculture and MSME sector in Q3. The slippage on corporate side too was moderate around Rs 600 crore."

According to him, Union Bank of India expects similar slippages from MSME and agri in Q4FY19, while it will moderate from Q1FY20 as agriculture has already started moderating.

"The gross NPA in MSME sector stand at 15 percent, while in Mudra loans they are at seven percent," he said.

With regards to non-banking finance companies (NBFCs) exposure, Rai said 90 of them are for ‘A’ rated and above.

Talking about Union Bank of India's exposure to IL&FS, he said, "The bank had provided Rs 800-900 crore loan to the thermal power plant and it has been serviced till November, 2018."

First Published:Jan 22, 2019 12:34 PM IST