Message
Dear Shareholders,
It gives me great pleasure to present our inaugural Integrated Annual
Report, a significant stride forward in our commitment to transparency and sustainability.
This report details the Bank's financial data as well as our social, environmental
and governance initiatives. It, thereby, provides a holistic picture of our contribution
to the financial services landscape, to our society and environment. Our move towards
Integrated Reporting reflects our determination to embed ESG practices into our core
business strategies, ensuring we create lasting value not just for our shareholders, but
also for our customers, employees, communities, and environment. Your continued trust
inspires our pursuit of responsible banking and inclusive growth.
Fiscal 2023 marked a continued improvement in economic activity in
India, despite significant challenges in the global environment. The overall economic
growth remains robust at 7.2 percent for the fiscal year 2022-23, and it was underpinned
by strong investment activity reinforced by the Government's capex push and private
consumption. However, inflation remained high, averaging around 6.7 percent in FY22- 23,
and started moderating towards the
end of the financial year. Going forward, the growth is expected to
slightly moderate in the current financial year FY23-24 owing to a combination of factors,
including slowing external demand, the development of El Nino conditions and volatile
global financial conditions. Despite moderation in growth, India is expected to remain the
fastest growing major economy in the world.
In the past few years, the Indian banking industry has seen significant
changes, such as the explosion of UPI led digital payments, significant expansion of
public payment infrastructure, budding fintech eco system, and technology-led shifts in
consumer behaviour. After the consolidation that took place amongst PSU banks over the
last five years, we are now witnessing the largest housing finance company merge with a
bank within its group, creating a banking behemoth. As consolidation gathers more
momentum, it is not unconceivable to see the top 5 banks in India have a majority market
share in the Indian banking system in the coming years. Such creation of large, strong and
efficient banks would make the banking system more robust and also bring scale benefits to
all stakeholders. Customers are likely to benefit from
such consolidation through better products and seamless service enabled
by higher technology investments. The larger banks would also be able to cater to the
needs of the fast growing Indian economy in a more efficient manner. Your bank is one of
the consolidating banks having absorbed Andhra Bank and Corporation Bank into its fold. It
is well positioned to be one of the beneficiaries of consolidation in the Indian banking
system and would make all necessary investments to capitalise on opportunities that come
its way.
During fiscal 2023, Union Bank of India has delivered a commendable
financial performance. We have recorded significant growth in key financial indicators,
reflecting our ability to adapt and make prudent business decisions. The strong growth in
our profits, a healthy capital adequacy ratio, and a substantial improvement in asset
quality, coupled with our focus on digitization and diligent risk management practices,
have ensured an attractive return to our stakeholders. The Bank is also simultaneously
building 'future ready' capabilities at a rapid pace. The creation of specialized
verticals for gold loans, education loans, current & salary accounts, cash management,
transaction & fraud monitoring etc., allows for a dedicated focus on specific
products/services, thereby providing enhanced customer value and better customer
experience. The Bank has strengthened its processes in credit and transaction monitoring,
fraud detection, and data mining to ensure corrective and remedial action is taken in a
timely manner.
At Union Bank of India, customer delight remains at the heart of
everything we do. With a customer base of 216+ million, we continue to place utmost
importance on understanding and meeting the evolving needs of our customers. Through our
extensive branch network of 8,580 branches & 10,835 ATMs, digital platforms and other
customer touchpoints, we have strived to deliver superior services, tailored financial
solutions, and an exceptional banking experience.
Technology continues to redefine how we operate, and we are committed
to embracing innovation and digitalization to stay ahead of the curve. We are proud of the
progress we have made in our digital journey, which has resulted in increased customer
satisfaction and stronger engagement. This focus on digitization has also allowed us to
streamline internal processes, reduce costs, and optimize resource allocation, creating
value for our shareholders. We now have 21 million plus customers registered on our Vyom
platform and provide access to 350+ banking services digitally, covering lending,
deposits, payments, and much more. Simultaneously, the Bank has rolled out 20+ Digital
Journeys covering both assets and liability product lines. We have implemented a CRM
system that enables customer 360 degree and a digital contact centre for efficient and
effective customer service. These initiatives will facilitate personalised and proactive
service, enhancing the customer satisfaction, loyalty and retention. As we look towards
the future, we are confident of successfully navigating the ever-changing dynamics of the
banking sector.
Furthermore, we firmly believe that as a responsible corporate citizen,
it is our duty to contribute to sustainable development and address environmental and
social challenges. Our Bank has integrated environmental, social, and governance (ESG)
practices into our business strategies, aligning with global sustainability goals.
We have supported initiatives relating to renewable energy,
environmental conservation, education, healthcare, and community development. Maintaining
the highest standards of corporate governance and transparency is of paramount importance
to us. We continue to strengthen our governance frameworks, ensuring compliance with
applicable laws, regulations, and ethical standards. Our engagement with stakeholders has
been instrumental in shaping our strategic decisions and fostering long-term relationships
built on trust and mutual benefit.
I would like to express my sincere gratitude to our dedicated 75,500+
employees whose relentless efforts and commitment have been the driving force behind the
Bank's success. I extend my appreciation to our valued customers for their continued
trust and support. I would also like to thank our esteemed shareholders for their
unwavering confidence and belief in our Bank's vision.
In conclusion, I am proud of our Bank's achievements during the
fiscal year 2022-23. We have demonstrated growth, resilience, innovation, and social and
environmental awareness in the changing operating business environment. Looking ahead, we
remain committed to enhancing customer value, embracing technological advancements, and
contributing to the socioeconomic progress of our nation.
With best wishes,
Srinivasan Varadarajan
Chairman