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Backed by a steady decline in non-performing assets, improvement in net interest income, trading profit, and higher recovery from written-off accounts, United Bank of India posted a net profit of ₹105 crore for the quarter ended June 30, 2019, against a net loss of ₹389 crore during the same quarter last year.
On sequential basis, the bank witnessed a 10 per cent rise in net profit, against ₹95 crore during the quarter ended March 31, 2019.
Net interest income grew by 33 per cent to ₹727 crore during the quarter under review, against ₹546 crore in the same period last year.
Gross NPA and net NPA declined to ₹11,640 crore (₹15,169 crore) and ₹5,496 crore (₹9,233 crore) during the period under review. Gross NPA, as a percentage of total advances, declined to 15.89 per cent (22.73 per cent), while net NPA declined to 8.19 per cent (15.17 per cent).
According to Ashok Kumar Pradhan, Managing Director and CEO, United Bank of India, gross NPA is expected to come down to 8-9 per cent, and net NPA to 4-5 per cent by the end of this fiscal.
Following the removal of certain restrictions imposed by the Reserve Bank of India on the bank in 2017, the lender could earn a profit of around ₹140 crore through propriety trading of securities.
“The RBI allowed us to sell securities purchased before 2017. The restriction was an additional one, over and above PCA, on the bank,” said Sanjay Kumar, Executive Director, United Bank of India.
The bank, which is under the prompt corrective action (PCA) measure of the RBI, is hopeful of coming out of it by September this year, backed by steady improvement in asset quality.
United Bank of India has declared two accounts in power and steel sectors – Bhushan Power and Steel and Visa Steel – as fraud during Q2 of the current fiscal. The bank had a collective exposure of about ₹929 crore in both these accounts. While the share of Visa Steel is less than ₹100 crore, in Bhushan Power and Steel, the bank has an exposure of around ₹850 crore.
Both these accounts have been referred to the NCLT. The bank has already provided around ₹900 crore, and the remaining provision in the accounts would be done by the bank as per regulatory requirements.
The bank’s scrip closed at ₹9.68, up 1.68 per cent on the BSE on Tuesday.
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