United Bank of India (UBI) is targeting an NPA recovery of around Rs 4,000 crore in the 2019-20 fiscal on the back of a one-time settlement (OTS) scheme, a top official said on Friday.

In the April-June quarter, the state-owned lender is expecting a recovery of Rs 300-400 crore, which would mainly accrue from the retailing sector, MD and CEO Ashok Kumar Pradhan said.

“We are not expecting any huge recovery from the resolution process, particularly from the steel and power sectors,” he said.

The Government holds over 96 per cent share capital in the bank.

Pradhan said that the board of directors has approved capital raising of Rs 1,000-1,500 crore either through QIP, private placement or share offer to employees.

The bank made a turnaround by reporting Rs 95 crore net profit in the March quarter, the first after seven consecutive quarters of losses.

During the quarter, the operating margin improved with healthy CASA growth and low cost of deposit, he said.

“We are now on the track of profitability after seven quarters. The challenge ahead of us is to consolidate our position further and register improvement under all banking parameters,” Pradhan said.

UBI had posted an overall net loss of Rs 2,316 crore in the last fiscal, owing to a rise in stressed assets and muted loan book growth.

The bank’s gross NPA reduced from 24.10 per cent to 16.48 per cent year-on-year, while net NPA came down from 16.49 per cent to 8.67 per cent, he said.

Pradhan said the lender received capital support to the tune of Rs 4,998 crore from the Centre during 2018-19.

He said UBI has been focusing on the RAM (Retail, Agricultural and MSME) segment for lending.

“We should be out of RBI’s prompt corrective action (PCA) framework by the second quarter of 2019-20,” he added.

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