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A steady rise in recoveries and reduction in non-performing assets saw Kolkata-based United Bank of India (UBI) script a turnaround and report a net profit of approximately ₹470 crore for the quarter ending March 31, 2014.
This comes after the bank reported two consecutive quarters of loss, thereby reporting a net loss of ₹1,683 crore for the first nine months of this fiscal.
For the full year (FY14) though, the bank reported a net loss of approximately ₹1,213 crore against a profit of ₹392 crore in FY13.
Asset quality According to Sanjay Arya, Executive Director, UBI’s gross recoveries were to the tune of over ₹2,592 crore.
While ₹645 crore were received as cash, ₹1,488 crore was recovered by way of upgradation – getting part recoveries.
“Focus has been on ensuring recoveries and bringing down NPAs,” he told reporters. Gross NPAs stood at ₹7,118 crore, while net NPAs stood at ₹4,664 crore. The bank’s gross NPA ratio stood at 10.47 per cent and net NPA ratio at 7.18 per cent.
Fresh slippages for the quarter stood at ₹1,149 crore.
The Bank would look to transfer bad loans to the tune of ₹300-400 crore to asset recovery companies (ARCs).
“We had made some attempts to sell bad loans to ARCs. But, things did not materialise. We would look to pursue the process in the first quarter of next fiscal,” Arya said.
Business For the full financial year, the bank reported 5.36 per cent growth in total business to ₹179,492 crore from the ₹170,359 crore it clocked in the last fiscal.
Total deposits saw a near 11 per cent increase to ₹111,510 crore while advances saw an approximate 2.50 per cent dip to ₹67,982 crore.
UBI’s interest income stood at ₹10,599 crore, a near 15 per cent growth over last year.
“In line with the RBI guidelines, we have slowed down on advances. We will now appeal to the RBI for some relaxation since the bank has made a turnaround,” the ED said.
Fresh capital According to Arya, the bank would look at qualified institutional placements to raise capital, apart from seeking fresh infusion by the Centre.
“We are yet to determine the amount we would raise through QIP,” he said.
UBI’s capital adequacy ratio (Basel III norms) stands at 9.81 per cent, as against the mandated 9 per cent requirement.
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