The Hindu Business Line : United Bank net rises 30.7%

Kolkata April 26 United Bank of India (UBI) has posted a 10.9 per cent increase in deposits and a 9.6 per cent increase in advances for the quarter ended March 31, 2007, at the close of which its total business stood at nearly Rs 60,000 crore.

The bank, which today announced its results for 2006-07, has recorded a 30.7 per cent increase in net profit at Rs 267 crore. The profit after providing for proposed dividend and tax thereon has been appropriated towards statutory reserve (Rs 67 crore) and revenue reserve (Rs 142 crore).

UBI, said Mr P.K. Gupta, Chairman and Managing Director, has seen an increase in operating profit from Rs 644 crore as on March 31, 2006, to Rs 719 crore as on March 31, 2007, a growth of about 12 per cent.

The total deposits have moved up from Rs 29,250 crore last year to Rs 37,167 crore, while its gross advances have grown from Rs 15,963 crore to Rs 22,643 crore.

The credit-deposit ratio has increased from 54.6 per cent to 60.9 per cent as on March 2007. UBI's priority sector advances, which have recorded a 32 per cent increase, are at Rs 9,045 crore. Agricultural advances have moved up by 16 per cent-plus to reach Rs 2,713 crore. Credit to the SSI sector has grown 21 per cent to reach Rs 1,581 crore.

"We have seen an improvement in our asset quality. Gross NPA has declined from 4.66 per cent to 3.6 per cent, while net NPA has decreased from 1.95 per cent in March last year to 1.5 per cent in March 2007," Mr Gupta told newspersons, adding that 17 NPAs were sold to ARCIL. These have a book value of about Rs 75 crore.

The bank has an on-going branch expansion plan, which will see the opening of 41 new branches by June. At the moment, roughly 22 per cent of UBI's business is under core banking solution.

No public issue now

UBI will not in the very near future go to the public for raising capital, the CMD said, indicating that the bank will for the time being remain an unlisted entity, one that will use its own resources to fund growth plans.

"We have room for over Rs 800 crore as Tier II capital," Mr Gupta said, adding that the bank has raised Rs 300 crore (Tier II) during 2006-07. UBI had earlier initiated an elaborate capital recast plan.

UBI will have to find ways to become more competitive, it is pointed out. Its capital adequacy ratio stood at 12.02 per cent in March 2007. It will pay nearly Rs 46 crore as dividend to the Government.

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