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United Bank of India plans to bring down its gross non-performing assets to below ₹6,000 crore by the end of this fiscal.
Gross NPAs for the quarter ending June 30, stood at ₹6,533 crore.
According to P Srinivas, Managing Director & Chief Executive Officer, UBI, the plan is to bring down gross NPAs to around 7.5-8 per cent. The bank’s current gross NPAs (as percentage of total advances) stands at 9.57 per cent.
He was speaking to reporters on the sidelines of the FICCI Banking Conclave.
The bank is also open to sale of sticky assets to asset reconstruction companies, he said. So far, it has not been able to do so (sell NPAs) for want of right valuation.
Capital infusion The Kolkata-based lender is hopeful of fund infusion of ₹500 crore this fiscal. It will also look to tap the markets to raise funds, if required.
“We are looking at ways to raise funds from the market. But, I think there is no need for that as we have sought a capital infusion of ₹500 crore from the Centre,” Srinivas said.
The MD and CEO also pointed out that it will take some time for interest rates to come down.
Low margins and no interest on NPAs, along with interest lag on restructured assets, have pushed up the cost of funds for the bank. It has, however, attempted to bring down its cost of funds by bringing down deposit rates (by 75 basis points over the last four months) to 7.5 per cent. “Interest rates will come down. But it takes time,” he said.
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