The Hindu Business Line : United Bank net down 4.7%

UNITED Bank of India has reported a net profit of Rs 300 crore for the year ended March 31, 2005, down by 4.7 per cent from Rs 315 crore recorded in the previous fiscal. The bank has attributed the drop partially to a decline in income from investments.

UBI has registered a 19.3 per cent increase in total business, which stood at Rs 37,187 crore for the year, up from Rs 31,179 crore scored during 2003-04. Its total deposits increased by 11.4 per cent to Rs 25,348 crore, while advances went up by 40.6 per cent to Rs 11,839 crore.

The bank, said Mr K. N. Prithviraj, Executive Director, has managed to record "a significant improvement" on the priority sector front; its agriculture and small-scale industry credit figures recorded 31.5 per cent and 60.5 per cent growth, respectively.

"We have contained our non-performing asset (NPA) numbers within more manageable levels," he told reporters on Saturday. The net NPA ratio has dipped to 2.43 per cent from 3.76 per cent in the previous year. The bank's total income stood at Rs 2,612 crore, up 1.3 per cent. Total expenditure dropped by 2.2 per cent to Rs 1,922 crore.

Returns from investments have been under pressure in the past year. The bank, however, has logged relatively high returns from trading in equities. Cash recoveries have been "healthy" during 2004-05, Mr Prithviraj said.

UBI has reported a major 88 per cent increase in retail credit. Its retail-lending portfolio stood at Rs 1,808 crore, up from Rs 961 crore in the previous year. This is due to the demand for housing loans generated by its customers.

Plans revamp

UBI has mandated National Institute of Bank Management (NIBM) to work out an organisational restructuring strategy. The consultant's report will be ready soon.

The bank would like to begin a far-reaching restructuring programme, Mr Prithviraj said. "We have age-old human resource policies, which would have to be re-written to suit current circumstances," he said, adding that the consultant had already started working on the project.

The recast process will involve interaction with some of the bank's customers. The bank management will consult all parties, including employee unions, in its restructuring efforts.

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