UBI executive directors Deepak Narang (left) and Sanjay Arya in Calcutta on Thursday. Picture by Kishor Roy Chowdhury
Calcutta, Aug. 14: A combination of lower provisions for non-performing assets, better recovery and treasury profits have helped the United Bank of India (UBI) to register a 47.3 per cent growth in net profit at Rs 65.89 crore for the quarter ended June 30 against Rs 44.73 crore in the corresponding period a year ago.
Net interest income, which is the difference between interest earned and spent, however, rose marginally by 1.61 per cent to Rs 596.41 crore during the quarter from Rs 587.02 crore in the year-ago period.
“We were having more than enough liquidity. Investments have been made in government securities and money market instruments. Whenever there are opportunities, we have booked trading profits. This has affected the net interest income but we have booked trading profits as well,” Sanjay Arya, executive director of the UBI, told The Telegraph.
The public sector lender has booked a 19.48 per cent rise in profit from trading during the quarter over the same period a year ago.
Provisions for non-performing assets declined to Rs 224.79 crore from Rs 305.17 crore in the corresponding quarter of 2013-14.
The gross NPAs of the bank declined on a sequential basis to Rs 7,097.44 crore from Rs 7,118.01 crore. Gross NPAs in the first quarter of 2013-14 was Rs 4,001.74 crore.
The UBI also made a cash recovery of Rs 340.38 crore during the quarter. Fresh slips in assets stood at Rs 1,193.92 crore
“We believe that the NPA crisis has bottomed out. We are not only making recoveries but also arresting fresh slippages. We have found that financing retail advances should be the focus and we are making efforts in that direction,” Deepak Narang, another executive director, said.
To strengthen the retail segment, which saw a growth of 7.29 per cent during the first quarter, Arya said the bank was planning to inaugurate centralised hubs where credit applications will be approved within 6 days.
To further shed bad assets, Narang said the bank was eyeing sales worth Rs 300-400 crore to asset restructuring companies in the current quarter.